OF  THE 

UNIVERSITY 

OF 


Copyright,  by  B.  L.  H.  Dabbs,  Pittsburg. 

ANDREW    CARNEGIE 


THE 
ROMANCE  OF  STEEL 


THE   STORY    OF 
A  THOUSAND  MILLIONAIRES 


BY 


HERBERT  N.  CASSON 


OF  THE 

UNIVERSITY 

OF 


NEW  YORK 
A.  S.  BARNES  &  COMPANY 

1907 


* 

* 


GENERAL 


COPYRIGHT,  1907,  BY 
A.  S.  BARNES  &  COMPANY 


All  Rights  Reserved 


To  the  men 

who  have  made  the  United  States  the  foremost  steel-making 
nation  in  the  world 


165080 


PREFACE 

THIS  book  is  the  first  popular  history  of  our  greatest  American 
industry.  The  wonderful  story  of  steel  is  here  told  in  such  a 
way  that  those  who  have  no  technical  knowledge  of  steel- 
making  may  enjoy  and  appreciate  the  miracles  that  have  been 
accomplished. 

First,  it  is  a  story  of  the  electric  expansion  of  a  business 
from  bankruptcy  to  billions.  It  is  an  American  story  of  self- 
help — of  the  unprivileged  men  who  climbed  from  poverty  to 
the  commercial  supremacy  of  the  world.  And  also  it  is  a 
biography  of  that  most  useful  of  all  metals — the  structural 
metal  of  modern  civilisation. 

Now  that  the  iron  and  steel  business  has  passed  into  the 
hands  of  more  than  sixty  thousand  stockholders,  there  has 
come  a  demand  for  a  popular  book  on  the  subject,  which  shall 
be  not  only  picturesque,  but  accurate  and  instructive  as  well. 
Therefore,  while  I  have  written  these  pages  after  the  manner 
of  fiction,  the  facts  have  been  gathered  from  the  highest  author- 
ities. Fully  nine-tenths  of  the  material  has  been  obtained  at 
first  hand,  either  from  the  Steel  Kings  themselves  or  from 
original  documents.  The  book  is,  in  fact,  the  result  of  a  two- 
years'  study  of  the  American  iron  and  steel  business,  made  on 
the  spot,  and  with  the  assistance  of  many  experts. 

I  take  this  opportunity  to  express  my  thanks  to  the  follow- 
ing gentlemen  for  their  courtesy  and  friendly  co-operation: — 
Andrew  Carnegie,  H.  C.  Frick,  John  Fritz,  Charles  M. 
Schwab,  Elbert  H.  Gary,  George  W.  Perkins,  George  Gould, 
James  M.  Swank,  George  Lauder,  John  Walker,  F.  T.  F. 


V11I 


PREFACE 


Lovejoy,  Thomas  N.  Miller,  John  W.  Gates,  Robert  W. 
Hunt,  Peter  White,  John  A.  Topping,  A.  C.  Dinkey,  H.  P. 
Bope,  Emil  Swensson,  Thomas  Lynch,  D.  M.  Clemson,  James 
Gayley,  D.  C.  Beaman,  W.  L.  Abbott,  W.  J.  Filbert,  Leonidas 
Merritt,  Charles  S.  Price,  S.  L.  Schoonmaker,  John  C.  Osgood, 
and  the  late  F.  T.  Hearne  and  Samuel  Thomas. 


CONTENTS 

CHAPTER    I 

THE    BIRTH   OF   THE    BESSEMER    PROCESS 

PAGE 

The  Youth  of  the  Steel  Trade— Demand  for  Cheap  Steel— Kelly's 
Epoch-Making  Discovery — His  Struggles  with  Failure — Mushet  and 
Bessemer — The  War  of  Patents — History  of  Bessemer — Beginning  of 
Titanic  Period  of  Steel-Making — The  First  Millionaire — Alexander 
L.  Holley — Captain  William  R.  Jones — His  Early  Adventures — How  he 
Broke  the  Records — -The  Race  with  England — Our  Steel  Supremacy — 
Jones  as  a  Leader  of  Men — His  Tragic  Death .  :.:  I 

CHAPTER   II 

THE  DISCOVERY  OF   THE   GREAT   ORE   RANGES 

The  Royal  Romance  that  Created  our  Iron  Business — The  Falling 
Creek  Massacre — The  Iron  Makers  of  Lynn — Struggles  with  Indians 
and  Puritans — Kings  and  Queens  who  Made  Iron  in  America — Baron 
Stiegel  and  Baron  Hasenclever — The  Iron-Making  Ancestors  of  Wash- 
ington and  Lincoln — The  Famous  Ironmasters  of  the  Revolution — The 
West  Point  Chain — Mrs.  Rebecca  Lukens — From  the  Revolution  to  the 
Civil  War— The  Demand  for  Ore— A  Billion-Dollar  Wilderness— Philo 
M.  Everett — His  Famous  Voyage  of  Discovery — How  Charlemagne 
Tower  Spent  Four  Millions  to  Make  Eight — Discovery  of  the  Mesaba 
Range  by  the  Merritt  Brothers — Wonders  of  a  Mesaba  Mine — The 
Building  of  the  Ore  Fleets — Profits  of  an  Ore  Railway — Lake  Superior 
Millionaires  .........  w .  .  .  .  34 

CHAPTER    III 

THE   RISE   OF   ANDREW   CARNEGIE 

Andrew  Carnegie  as  a  Boy — His  Heritage  of  Poverty — How  He 
Rose — Adventures  as  a  Company  Promoter — His  Entrance  into  Iron 


x  CONTENTS 

PAGE 

Business — Early  Attempts  at  Authorship — His  Three  Partners — Finan- 
cial Difficulties — Carnegie  as  a  Bond  Broker — How  He  Became  a  Steel 
Maker — The  Secret  of  His  Success — The  Lucy  Furnaces — A  Golden 
Flood  of  Profits— The  Fate  of  Carnegie's  Partners— The  Caesar  of  Steel  68 


CHAPTER   IV. 

THE   CARNEGIE   COMPANY   UNDER  FRICK 

Henry  Clay  Frick  as  a  Farm  Boy — His  Debut  as  a  Capitalist — 
Becomes  King  of  Coke — The  Picturesque  Region  of  Connelsville — How 
Frick  Entered  the  Carnegie  Company — The  Capture  of  Homestead  and 
Duquesne — Henry  Oliver,  the  Man  behind  the  Ore — His  Romantic 
Career — Dangers  of  Steel-Making — The  Carnegie  System — Original 
Methods  of  Carnegie — Muscle  versus  Machinery — The  Battle  of  Home- 
stead— The  Downfall  of  Unionism — Carnegie  and  Frick  as  Employers — 
Homestead  after  the  Strike — Miracles  of  Machinery 104 


CHAPTER   V 

THE   WORKMEN-PARTNERS   OF   ANDREW   CARNEGIE 

Forty  Workmen  who  Became  Millionaires — Romances  of  Self-Help 
— The  Rise  of  Charles  M.  Schwab — His  Work  at  Homestead — Contrast 
between  Schwab  and  Corey — Why  Carnegie  Promoted  Young  Men — 
The  Era  of  Rapid  Production — Forty  Millions  of  Profit — Carnegie  as  a 
Typical  American — His  Faith  in  the  Future  of  Steel — The  Career  of 
Henry  Phipps  .  .  .  .  .  ,.:  .  ,.:  ;.  .  145 

CHAPTER  VI 

THE   HARVEST   OF   GOLD 

The  Frick-Carnegie  Quarrel — Personality  of  Frick — His  Business 
Methods — Entrance  of  William  H.  Moore  into  the  World  of  Steel — 
How  John  D.  Rockefeller  Tried  to  Buy  Out  Carnegie— The  Great  Steel 
War — Carnegie's  Selling  Campaign — How  His  Price  Rose  to  Nearly 
Half  a  Billion— The  Men  Who  Paid  it— The  Shower  of  Gold— How 
Oliver  Made  Thirteen  Millions — The  Money-Mad  Pittsburghers — Fads 


CONTENTS  xi 

PAGE 

of  the  New  Millionaires — Carnegie's  Thirteen  Million  Dollar  Pension 

— His  Democratic  Habits — The  Story  of  His  Generosity     .      .      .      .175 


CHAPTER  VII 

J.   PIERPONT   MORGAN   AND   THE    UNITED   STATES   STEEL   CORPORATION 

The  Timely  Advent  of  Morgan — His  Masterful  Personality — His 
Big  Associates — Magnitude  of  the  New  Corporation — Its  Vast  Posses- 
sions— Fourteen  Hundred  Millions  of  Capital — How  the  Big  Company 
was  Launched — The  Question  of  Over-Capitalisation — The  Chicago 
Steel  Men — John  W.  Gates,  the  Wire  King — His  Financial  Exploits — 
The  Napoleons  of  Tin  Plate — The  New  Triumvirate  of  Steel.  .  .  209 


CHAPTER   VIII 

SIX  YEARS  OF  THE  STEEL  TRUST 

Morgan's  Policy  of  Publicity — The  Slump  of  1903 — Return  of 
Prosperity — Benefits  of  Consolidation — A  Modern  Coal  Mine — Gary, 
the  New  Steel  City — The  Corporation  and  Its  Workmen — 'New  System 
of  Profit-Sharing— The  Menace  of  Wall  Street— The  Five-Year  Record 
of  the  Steel  Trust — Mistakes  and  Achievements — Its  Influence  upon  Busi- 
ness Conditions — A  Billion  Dollars  to  Labour  and  Capital  ....  239 


CHAPTER   IX 

PITTSBURGH 

A  City  of  Practical  Thinkers — The  Man-Power  of  Its  Machinery — 
Pittsburgh  and  the  Pyramids — Its  Supremacy  in  Steel — The  Pay  Car  of 
the  Steel  Trust— Pittsburgh  as  a  World-Power— The  Shirt-Sleeve  Mil- 
lionaires— Social  Conditions — Railroads  and  Waterways — Suburban  Pal- 
aces— Progress  and  Politics — Pittsburgh's  Romantic  Childhood — Early 
Days  of  Iron-Making — Low  Wages  and  Small  Profits — The  First  Fur- 
naces—Pittsburgh as  a  Port— The  "Fathers  of  Steel  "—Incredible 
Wealth  and  Energy 259 


xii  CONTENTS 

CHAPTER  X 

BIRMINGHAM   AND   PUEBLO 

PAGE 

Dramatic  Beginnings  in  the  South  and  West — Natural  Wealth  of 
Alabama — Its  Amazing  Growth — A  Centre  of  Cheap  Production — Spec- 
tacular Career  of  De  Bardeleben — Iron-Making  Pioneers  and  Northern 
Capitalists — Magnitude  of  the  Tennessee  Coal  and  Iron  Company — Don 
H.  Bacon— John  A.  Topping— The  John  W.  Gates  Syndicate— The 
Sloss-Sheffield  Company — Achievements  of  the  Alabamians — Drawbacks 
of  Negro  Labour — The  Romance  of  Colorado — Its  Isolation  and  Self- 
Reliance — J.  C.  Osgood  and  His  Partners — The  Colorado  Fuel  and  Iron 
Company — Battle  with  Gates  and  Harriman — The  Advent  of  Gould  and 
Rockefeller — Tragic  Fate  of  Pioneers — Frank  J.  Hearne — Pueblo,  the 
Workshop  of  the  West — Its  Scenic  Beauty  and  Enterprise  .  .  ;.  .  294 


CHAPTER  XI 

STEEL   KINGS  OF   MANY  CITIES 

Carnegie's  Successor,  B.  F.  Jones — Development  of  Jones  and 
Laughlin  Company — The  Seven  Steel  Companies  of  Philadelphia — Diss- 
ton,  the  Saw-Maker — Joseph  Wharton,  the  Iron-Maker  Poet — The  Iron 
City  of  Reading — The  International  Harvester  Company — Buffalo  as  a 
Steel  Centre — The  New  Lackawanna  Steel  Company — The  Bethlehem 
Works — Mark  Hanna  and  Mayor  Johnson — Mrs.  Kelley,  Iron-Maker 
— James  J.  Hill  as  an  Ore  King — A  Two-Billion-Dollar  Industry  .  .  320 


CHAPTER   XII 

THE   FUTURE   OF   STEEL 

A  Thousand  Steel  Kings  in  a  Thousand  Days — Different  Views  of 
the  Future — The  Wonders  of  American  Steel  Magic — New  Uses  for 
Steel — The  Great  War  of  the  Future — Growth  of  Foreign  Trade — The 
To-morrow  of  Pittsburgh — Cleveland  as  a  Steel  City — Detroit  and  Cin- 
cinnati— The  Opportunity  of  Duluth — The  Battle  against  Conservatism 
—James  Gayley's  "  Dry  Blast  "—The  Question  of  Quality— The  Flesh- 
and-Blood  Cost  of  the  Millions— The  Higher  Uses  of  Steel  ....  338 


ILLUSTRATIONS 


Andrew  Carnegie 


^Frontispiece 


William  Kelly   . 

Kelly's  First  Tilting  Converter 

Sir  Henry  Bessemer   .         ;.i 

Captain  Eber  B.  Ward 

Daniel  J,  Morrell 

Captain  William  R.  Jones  ; 

Falling  Creek  as  It  Is  To-Day 

Mrs.  Rebecca  Lukens 

Philo  M.  Everett       ,         .., 

Alfred  Merritt  ...        :. 

Leonidas    Merritt 

Thomas  A.  Scott         .         :o! 

Thomas  N.  Miller      .- 

Henry  Phipps    ,          o!        ;.i 

David  McCandless     [.:        M 

James  Scott       •••        :.,        M 

William  P.  Shinn       . 

Henry  Clay  Frick,  as  a  young 

Thomas  Lynch 

In  the  Connellsville  Region 

Julian  Kennedy  .         ;.; 

Henry  W.  Oliver       .         ,., 

Charles  M.  Schwab    ,..         ,., 

George  M.  Lauder     .         ie, 

Francis  T.  F.  Love  joy        w 

Thomas  Morrison       .         [0. 

Alva  C.  Dinkey 

Azor  R.  Hunt  :-l        ,.: 

D.  G.  Kerr 

W.  W.  Blackburn      . 

D.  M.  Clemson         it.        w 

Tom  L,  Johnson        M        u 


man     M 


PAGE 

1.1 

4 

lei 

8 

lei 

12 

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lei 

1.1          24 

lei 

;.         32 

;.< 

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lei 

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lei 

le,             48 

i.; 

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iej 

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Ie; 

«.          70 

:o< 

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r.i 

M      80 

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to] 

1.1      90 

LO] 

i.i      96 

M 

i.     104 

[e; 

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[e! 

,.     108 

Ie] 

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lo, 

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lo! 

:.;        146 

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r.'       150 

[0] 

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fe! 

r.        154 

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t«i    1166 

ILLUSTRATIONS 

F.  B.  Smith      [,]        [.]  (.,  10,  ;.  .  .  ,.         i.         ,.; 

S.  L.  Schoonmaker      >  M  t.,  ^  ,  .  r.         i.,        t. 

Henry  H.  Rogers       ...  ,.,  ,.,  M  ,.,  If,  ;..        ,. 

John  D.  Rockefeller    .  r-1  to]  t..  rw  ,.,  v        ,., 

Lord  Leith         .         :.;  ,.,  [0]  w  {.  ,  v        ...        ,., 

'H.  H.  Porter     •         r.  M  r,,,  w  .  t..  .         w        ,.. 

Francis  Lynde  Stetson  w  „  w  t.  *  .         ,.,        ,., 

William  E.  Corey      ,.;  t.,  ,.,  r.,  ,.  ,.,  .,        ,.,        ,.. 

J.  Pierpont  Morgan   .  M  ,.,  ..,  ,.  ,.  r,,        ,.,        ,.. 

Abram  S.  Hewitt       n  eu  1.1  f.:  t.  i.j  M        1.1        c: 

James  H.  Reed           ,.,  M  M  r.  t.;  t.i  M        r.i        i. 

D.   O.   Mills         .01            M  t.,  M  ,.  ,.  [.,  r.,            ,.j            r.: 

Charles  Steele             ,.,  M  M  t.,  ,.,  ,.,  ,.:        w        f. 

George  W.  Perkins    w  w  ...  fi  ..i  t.i  r.. 

Elbert  H.  Gary          [.,  r.,  M  tu]  M  ,.,  i., 

James   Gayley    .         Ioi  (.i  t.:  ..j  1.1  1.1  1.1 

Joshua  Rhodes  .         [.,  w  ,.,  ,.,  ,.,  u,  w 

Homer  J.  Lindsay       .  w  ,.,  r.,  ,., 

-H-*    i»    l>Ope             •              i,'  roi  [•!  [•]  [•; 

Wo  H.  Singer     .         -.-  r.;  r.-  r.i  w. 

A.    JV.    JreaCOCK                   r»i  ro-,  [.!  t*i  t»i  [•;  [.)             re: 

William  L.  Abbott      •.  ,.,  :.;  ,.,  ,.,  ,.,  ..,        c,, 

J.  J.  Vandergrift         .  :.,  :.  ,.:  ,.,  ,.,  M        ,., 

Henry  F.  De  Bardeleben   ,;  t.:  ,.,  (.i  [e,  ,.,        M 

Don  H.  Bacon  .         .  ,;  ;.,  [.,  r.;  ..i  1.1        i.. 

Colonel  J.  W.  Sloss     .  ,.:  ,..  ,..  ,..  :-1  ,.,        w 

John  Cleveland  Osgood  .-  :.:  >  -.; 

John  D.  Rockefeller,  Jr.  ,.,  w  ,.:  ;., 

Frank  J.   Hearne       ,..  M  &,  w  M 

Lawrence  C.  Phipps  .:  M  ,.,  [.,  [oi 

Peter  A.  B.  Widener  M  t.,  w  M 

Foster   Milliken         w  w  w  w  ,., 

Henry  Chisholm        M  tei  M  M  t.i 


THE  ROMANCE  OF  STEEL 

THE  STORY  OF  A  THOUSAND  MILLIONAIRES 


CHAPTER   I 
THE  BIRTH  OF  THE  BESSEMER  PROCESS 

The  Tremendous  Modern  Expansion  of  the  Iron  and  Steel  Industry  which 
Began  with  the  Invention  of  the  Bessemer  Process — How  Kelly  in 
America  and  Bessemer  in  England  Evolved  their  Epoch-Making  Dis- 
covery and  Sketches  of  the  Big  Men  Who  Took  the  Lead  in  Developing  It. 

THE  dramatic  and  sensational  development  of  the  steel 
and  iron  industry  in  America,  in  its  broadest  sweep, 
is  bounded  by  forty  years.    More  progress  has  been 
made  within  this  space  than  in  all  our  earlier  colonial  and 
national  life.     Indeed,  the  last  thirty  years  have  turned  out 
more  iron  and  steel,  the  world  over,  than  was  produced  in  all 
the  previous  centuries  of  known  history. 

Naturally,  those  who  have  produced  this  vast  supply  of 
an  indispensable  metal  have  become  the  masters  of  incredible 
wealth.  The  biggest  business  fact  in  the  world  is  the  United 
States  Steel  Corporation.  It  has  more  stockholders  than  the 
population  of  Nevada ;  more  employees  than  there  are  voters  in 
Maine;  more  profits,  in  a  good  year,  than  the  revenue  of  the 
city  of  New  York.  Above  all  ordinary  corporations  it  towers 
like  the  Great  Pyramid  of  Cheops  above  the  sand  mounds  of 
the  desert.  Yet,  vast  as  it  is,  it  represents  less  than  two-thirds 
of  the  American  iron  and  steel  industry.  It  would  be  a  two- 
billion-dollar  corporation  if  it  included  the  whole  trade. 

If  this  unparalleled  development  had  been  the  result  of 
centuries,  it  would  still  be  wonderful  enough;  but  it  is  prac- 
tically the  harvest  of  one  generation's  sowing.  There  is  not 
a  chapter  of  ancient  history  in  the  Story  of  Steel.  Any  one 


THE    ROMANCE   OF   STEEL 

who  visits  the  little  Pennsylvania  town  of  Bethlehem  may  still 
see  John  Fritz,  who  might  almost  be  called  the  Father  of  the 
Steel  milL  In  Louisville  still  lives  a  white-haired  old  lady, 
wife  of  William  Kelly,  the  original  inventor  of  what  is  called 
BeGsemer  steel.  In  Chicago  any  visitor  may  see  Bob  Hunt, 
whose  personal  reminiscences  reach  back  to  the  earliest  dawn 
of  the  steel  era.  And  the  masterful  Scot  who  rescued  our  steel 
business  from  periodic  bankruptcy,  and  won  for  it  the  com- 
mercial supremacy  of  the  world,  is  still  flitting  between  New 
York  and  Skibo  and  thinking  more  of  the  future  than  of  the 
past. 

Even  our  younger  steel  kings — Frick,  Schwab,  Corey,  Mor- 
rison, Dinkey,  Jones,  and  the  rest — can  remember  the  early 
period  of  small  sales  and  petty  economies.  Hundreds  of  men 
who  helped  to  rock  the  steel  giant  in  his  cradle  are  still  to 
be  found  in  the  mills  and  offices  of  Pittsburgh.  In  Johnstown 
may  be  seen  the  first  tilting  converter  that  Kelly  used  in  making 
Bessemer  steel ;  and  the  boy  who  helped  the  inventor  with  his 
experiments  is  still  employed  in  the  Cambria  mills.  In  fact, 
the  whole  steel  industry  is  so  young  that  nine-tenths  of  the 
information  in  this  volume  was  obtained,  not  from  libraries, 
but  from  the  men  and  women  who  have  seen  it  grow  out  of 
feeble  infancy  into  its  golden  age. 

On  that  bleak  November  day  when  Andrew  Carnegie  was 
born  in  a  Scottish  cottage,  the  iron-  and  steel-makers  of  America 
had  no  more  thought  of  millions  than  of  castles  in  Spain.  Steel 
sold  for  twenty-five  cents  a  pound.  The  ironmasters  mined 
little  coal  and  baked  no  coke.  Not  an  ounce  of  iron  had  been 
made  in  Wheeling,  Youngstown,  Cleveland,  or  Chicago — the 
latter  being  a  fur-trading  village,  without  harbour  or  railroad. 
Birmingham,  Alabama,  was  not  on  the  map  until  two-score 
years  later.  There  was  not  a  foot  of  railroad  near  Pittsburgh, 
and  not  one  rail,  either  of  iron  or  steel,  had  been  produced  in 
any  part  of  the  country.  And  the  total  American  output 


BIRTH   OF   THE   BESSEMER   PROCESS 

of  iron  in  that  year  was  less  than  we  make  now  in  four 
days. 

As  late  as  the  beginning  of  the  Civil  War,  what  was  called 
a  first-class  furnace  would  cost  about  fifty  thousand  dollars, 
employ  seventy  men,  and  produce  a  thousand  tons  of  iron  a 
year.  The  business  was  conducted,  not  by  corporations,  but 
by  individual  ironmasters,  who  ruled  in  a  truly  feudal  way 
over  their  small  communities.  There  were  no  millionaires, 
and  what  little  money  an  iron-maker  had  was  liable  to  become 
waste  paper  at  any  moment  by  the  collapse  of  a  rickety  bank. 
Four  furnaces  out  of  five  were  haunted  by  the  spectre  of  debt; 
and  in  a  bad  year,  like  1837  or  1857,  scores  of  furnaces  were 
blown  out.  The  tariff,  too,  was  even  more  variable  than  the 
currency.  It  was  raised  and  lowered  by  the  fitful  gusts  of  poli- 
tics until  1861,  when  the  Morrill  tariff  first  gave  some  chance 
of  stability  to  the  unfortunate  industry. 

With  the  Civil  War  came  the  first  large  orders  and  con- 
tinuous business/T/very^plant  was  run  night  and  day.  The 
output  of  iron  nearly  doubled,  and  the  price  jumped  from 
$18.60  to  as  high  as  $73.60  per  ton.  Of  the  three  billion 
dollars  that  the  war  cost  the  Federal  Government,  a  goodly 
share  went  to  the  iron  men.  Uncle  Sam  was  the  best  cus- 
tomer they  had  ever  known.  They  had  a  surplus  in  the  bank, 
at  last — a  store  of  capital  which  enabled  them  to  do  business 
on  a  larger  scale.  When  the  smoke  of  battle  had  cleared  away, 
Captain  Eber  B.  Ward,  of  Detroit,  loomed  up  as  the  first  of  the 
iron  kings,  with  several  millions  to  his  credit  and  three  flour- 
ishing plants,  in  Chicago,  Detroit,  and  Milwaukee. 

The  marvellous  modern  expansion  of  the  iron  and  steel 
industry  was  now  about  to  begin.  The  germ  of  its  stupendous 
growth  lay  in  the  invention  of  the  Bessemer  process.  It  is 
necessary,  therefore,  that  this  chapter  should  describe  that  won- 
derful discovery — what  it  is,  and  how  and  when  and  by  whom 
it  was  invented. 


THE    ROMANCE   OF   STEEL 

THE    DEMAND    FOR    CHEAP    STEEL 

When  there  arises  a  demand  for  something  that  shall  play 
a  vital  part  in  our  national  and  social  development — a  demand 
which  is  earnest  and  universal — science  is  pretty  sure  to  meet 
it.  Even  nature  must  yield  when  the  human  race  centres  its 
brain-force,  with  white-hot  energy,  upon  a  certain  point  of 
attack.  It  was  so  in  the  cases  of  electricity,  railroads,  cables, 
the  telegraph,  and  the  telephone ;  and  fifty  years  ago  the  most 
pressing  need  of  the  civilised  world  was  a  new  metal — one 
that  would  be  as  strong  as  steel  and  as  cheap  as  iron.  This 
was  more  than  a  trade  problem.  The  railroads  were  using 
iron  rails,  which  wore  out  in  less  than  two  years.  The  largest 
locomotive  of  that  time  would  to-day  be  considered  little  more 
than  a  toy.  There  were  no  skyscrapers  and  no  subways,  and 
stages  were  practically  the  only  street-cars.  Neither  wood  nor 
iron  was  fit  for  the  new  uses  of  the  growing  republic;  and 
the  high  cost  of  steel  made  it  almost  as  much  out  of  the 
question  as  silver.  The  greatest  need  of  the  world  was  cheap 
steel. 

At  this  juncture  an  answer  to  the  universal  demand  was 
voiced  by  the  inventive  genius  of  two  men — William  Kelly, 
a  Pittsburgh  Irish-American,  and  Sir  Henry  Bessemer,  an 
Englishman  of  French  descent.  They  devised  a  new  way 
to  refine  iron,  which  has  since  been  known  as  the  Bessemer 
process.  Their  discovery  was  an  entirely  new  idea  and  one 
which  at  first  seemed  absurd  to  every  other  steel-maker;  but 
within  a  few  years  it  was  universally  adopted,  revolutionising 
the  iron  and  steel  trade,  and  providing  the  world  with  a  cheap 
and  abundant  supply  of  its  most  useful  metal.  It  expanded 
the  industry  with  almost  the  suddenness  of  an  explosion,  and 
for  the  first  time  in  the  long  history  of  steel-making  the  steel- 
smiths  were  fairly  swept  off  their  feet  by  a  flood  of  riches. 
Hundreds  of  individuals  were  picked  up — by  merit,  by  luck, 

4 


WILLIAM    KELLY 


BIRTH   OF   THE   BESSEMER    PROCESS 

or  by  chance — and  flung  upon  the  golden  thrones  of  an  inter- 
national empire  of  steel. 

In  1846  William  Kelly  and  his  brother  bought  the  Suwanee 
Iron  Works,  near  Eddyville,  Kentucky.  Kelly's  father  was 
a  well-to-do  landowner  in  Pittsburgh,  where  it  is  said  that  he 
erected  the  first  two  brick  houses  in  the  city.  At  the  time 
when  William  Kelly  began  to  make  iron,  he  was  thirty-six 
years  old — a  tall,  well-set-up,  muscular,  energetic  man,  with 
blue  eyes  and  close-cropped  beard.  In  inventiveness  his  brain 
ranked  high;  in  business  ability,  low.  He  had  left  a  com- 
mission business  and  become  an  iron  maker  mainly  to  carry 
out  a  process  which  he  had  invented,  by  which  larger  sugar- 
kettles  were  to  be  made.  The  "Kelly  kettles"  became  well 
known  among  the  Southern  farmers. 

He  had  married  Miss  Mildred  A.  Gracy,  of  Eddyville, 
and  secured  the  financial  backing  of  his  wealthy  father-in-law. 
His  iron  plant  was  a  fairly  good  one,  close  to  high-grade  ore, 
and  needing  the  work  of  about  three  hundred  negro  slaves. 
Mr.  Kelly  was  strongly  opposed  to  slavery,  and  tried  to  escape 
being  a  slaveholder  by  importing  Chinese.  He  was  the  first 
employer  in  this  country  to  make  this  experiment,  and  found 
it  successful;  but  international  complications  prevented  him 
from  putting  it  into  practice  on  a  larger  scale. 

Kelly's  first  aim  was  to  make  good  wrought  iron,  for  riis 
kettles  and  for  customers  in  Cincinnati.  His  iron  was  refined 
in  what  was  called  a  "  finery  fire  "—a  small  furnace  in  which 
about  fifteen  hundred  pounds  of  pig  iron  were  placed  between 
two  layers  of  charcoal.  The  charcoal  was  set  on  fire,  the  blast 
was  turned  on,  and  more  charcoal  was  added  until  the  iron 
was  thoroughly  refined — a  slow,  old-fashioned  process  which 
used  up  quantities  of  charcoal. 

In  a  year  all  the  wood  near  the  furnace  had  been  burned, 
and  the  nearest  available  source  of  supply  was  seven  miles 
distant — a  fact  with  which  the  unbusinesslike  Kelly  had  not 

5 


THE   ROMANCE  OF   STEEL 

reckoned.     To  cart  his  charcoal  seven  miles  meant  bank- 
ruptcy, unless — he  could  invent  a  way  to  save  fuel. 

KELLY'S  EPOCH-MAKING  DISCOVERY 

One  day  he  was  sitting  in  front  of  the  "  finery  fire  "  when 
he  suddenly  sprang  to  his  feet  with  a  shout,  and  rushed  to 
the  furnace.  At  one  edge  he  saw  a  white-hot  spot  in  the 
yellow  mass  of  molten  metal.  The  iron  at  this  spot  was  incan- 
descent. It  was  almost  gaseous.  Yet  there  was  no  charcoal- 
nothing  but  the  steady  blast  of  air.  Why  didn't  the  air  chill 
the  metal?  Every  iron-maker  since  Tubal  Cain  had  believed 
that  cold  air  would  chill  hot  iron.  But  Kelly  was  more  than 
an  iron-maker.  He  was  a  student  of  metallurgy,  and  he  knew 
that  carbon  and  oxygen  had  an  affinity  for  each  other.  He 
knew  what  air  was  and  what  iron  was,  and  like  a  flash  the 
idea  leaped  into  his  excited  brain — there  is  no  need  of  char- 
coal. Air  alone  is  fuel. 

It  was  as  simple  as  breathing,  and  very  similar,  but  no 
human  mind  had  thought  of  it  before.  When  the  air  is  blown 
into  the  molten  metal,  the  oxygen  unites  with  the  impurities 
of  the  iron  and  leaves  the  pure  iron  behind.  Oxygen — that 
mysterious  element  which  gives  life  to  all  creatures,  yet  which 
burns  up  and  destroys  all  things;  oxygen,  which  may  be  had 
without  money  in  infinite  quantities — was  no\v  to  become  the 
creator  of  cheap  steel. 

Kelly  was  carried   away  by  the  magnitude  of  his  idea. 
His  unrestrained  delight,  after  months  of  depression,  amazed 
every  one  in  the  little  hamlet.    Most  of  his  neighbours  thought 
him  crazy.     Only  three  listened  with  interest  and  sympathy- 
two  English  iron-workers  and  the  village  doctor. 

At  first  Kelly  snapped  his  fingers  at  opposition.  "I'll 
prove  it  publicly,"  he  said.  At  his  invitation  a  number  of 
jesting  iron-makers  from  western  Kentucky  gathered  around 


BIRTH   OF   THE   BESSEMER    PROCESS 

his  furnace  the  following  week,  and  Kelly,  caring  nothing  for 
patents,  explained  his  idea  and  gave  a  demonstration  of  it. 
Air  was  blown  through  some  melted  pig  iron,  agitating  it  into 
a  white  heat,  to  the  amazement  of  the  brawny  onlookers.  A 
blacksmith  seized  a  piece  of  the  refined  iron,  cooled  it,  and 
with  his  hammer  produced  in  twenty  minutes  a  perfect  horse- 
shoe. He  flung  it  at  the  feet  of  the  iron  men,  who  could  not 
believe  their  eyesight,  and,  seizing  a  second  scrap  of  the  iron, 
made  nails  and  fastened  the  shoe  to  the  foot  of  a  near-by  horse. 
Pig  iron,  which  cannot  be  hammered  into  anything,  had  been 
changed  into  malleable  iron,  or  something  very  much  like  it, 
without  the  use  of  an  ounce  of  fuel. 

Surely,  the  thing  was  too  absurd.  Seeing  was  not  believ- 
ing. "  Some  crank  '11  be  burnin'  ice  next,"  said  one.  The 
iron  men  shook  their  heads  and  went  home,  to  boast  in 
after  years  that  they  had  seen  the  first  public  production  of 
"  Bessemer  "  steel  in  the  world. 

Kelly  called  his  invention  the  "pneumatic  process,"  but 
it  became  locally  known  as  "  Kelly's  air-boiling  process."  He 
proceeded  at  once  to  refine  his  iron  by  this  method.  He  sent 
his  steel,  or  refined  iron,  or  whatever  it  was,  to  Cincinnati, 
and  no  flaws  were  found  in  it.  Years  before  Mr.  Bessemer  had 
made  any  experiments  with  iron,  there  were  steamboats  on 
the  Ohio  River  with  boilers  made  of  iron  that  had  been  refined 
by  Kelly's  process. 

KELLY'S  APPARENT  FAILURE 

But  now  came  a  form  of  opposition  that  Kelly  could  not 
defy.  His  father-in-law  said:  "Quit  this  foolishness  or 
repay  the  capital  I  have  advanced."  His  Cincinnati  cus- 
tomers wrote:  "We  understand  that  you  have  adopted  a 
new-fangled  way  of  refining  your  iron.  Is  this  so?  We 
want  our  iron  made  in  the  regular  way  or  not  at  all." 

About  the  same  time    Kelly's  ore  gave  out.     New  mines 

7 


THE    ROMANCE   OF   STEEL 

had  to  be  dug.  Instead  of  making  ten  tons  a  day,  he  made 
two. 

He  surrendered.  He  became  outwardly  a  level-headed, 
practical,  conservative  iron-maker,  and  won  back  the  confi- 
dence of  his  partners  and  customers.  Then  one  night  he  took 
his  "pneumatic  process"  machinery  three  miles  back  into  a 
secluded  part  of  the  forest  and  set  it  up.  Like  Galileo,  he 
said:  "  Nevertheless,  air  is  fuel!  "  No  one  knew  of  this  secret 
spot  except  the  two  English  iron-workers  whom  he  brought 
out  frequently  to  help  him. 

Under  such  conditions  progress  was  slow.  By  1851  his 
first  converter  was  built — a  square,  brick  structure,  four  feet 
high,  with  a  cylindrical  chamber.  The  bottom  was  per- 
forated for  the  blast.  He  would  first  turn  on  the  blast,  and 
then  put  in  melted  pig  iron  with  a  ladle.  About  three  times 
out  of  five  he  succeeded.  The  greatest  difficulty  was  to  have 
the  blast  strong  enough;  otherwise  the  iron  flowed  through 
the  air-holes  and  clogged  them  up. 

His  second  converter  was  made  with  holes  in  the  side,  and 
worked  better.  He  discovered  that  he  could  do  ninety  min- 
utes' work  in  ten,  and  save  further  expense  in  fuel.  One 
improvement  followed  another.  In  all,  he  built  seven  con- 
verters in  his  backwoods  hiding-place. 

In  1856  Kelly  was  told  that  Henry  Bessemer,  an  English- 
man, had  taken  out  a  United  States  patent  for  the  "  pneumatic 
process."  This  aroused  Kelly's  national  pride  more  than  his 
desire  for  a  monopoly,  and  he  at  once  filed  in  the  patent  office 
his  claims  to  priority  of  invention.  The  patent  office  was  con- 
vinced and  granted  him  United  States  Patent  No.  17,628, 
declaring  him  to  have  been  the  original  inventor. 

Then  came  the  panic  of  1857,  and  Kelly  was  one  of  the 
thousands  who  toppled  over  into  bankruptcy.  To  get  some 
ready  money,  he  sold  his  patent  to  his  father  for  a  thousand 
dollars.  Not  long  afterwards,  the  elder  Kelly  died,  and 

8 


KELLY'S  FIRST  TILTING  CONVERTER 


BIRTH    OF   THE   BESSEMER    PROCESS 

willed  his  rights  to  his  daughters,  who  were  shrewd,  business- 
like women.  They  regarded  their  brother  William  as  a  child 
in  financial  matters,  and  refused  to  give  him  his  patent.  After 
several  years  of  unjustifiable  delay,  they  transferred  it  to 
Kelly's  children.  And  so,  between  his  relations  and  his 
creditors,  Kelly  was  brought  to  a  standstill. 


KELLY'S  FIRST  TILTING  CONVERTER- 

But  even  at  the  lowest  point  of  defeat  and  poverty,  he 
persevered.  Without  wasting  a  day  in  self-pity,  he  went  at 
once  to  the  Cambria  Iron  Works,  at  Johnstown,  Pennsylvania, 
and  secured  permission  from  Daniel  J.  Morrell,  the  general 
superintendent,  to  make  experiments  there. 

"  I'll  give  you  that  corner  of  the  yard  and  young  Geer 
to  help  you,"  said  Morrell. 

In  a  short  time  Kelly  had  built  his  eighth  converter— 
the  first  that  really  deserved  the  name — and  was  ready  to 
make  a  public  demonstration.  About  two  hundred  shop- 
men gather  around  his  queer-looking  apparatus.  Many  of 
them  were  puddlers,  whose  occupation  would  be  gone  if  Kelly 
succeeded.  It  is  often  fear  that  makes  men  scoff,  and  the 
puddlers  were  invariably  the  loudest  in  ridiculing  the  "  Irish 
crank." 

"  I  want  the  strongest  blast  you  can  blow,"  said  Kelly 
to  Leibfreit,  the  old  German  engineer. 

"  All  right,"  answered  Leibfreit.    "  I  gif  you  blenty!  " 

Partly  to  oblige  and  partly  for  a  joke  Leibfreit  goaded 
his  blowing  engine  to  do  its  best,  hung  a  weight  on  the  safety- 
valve,  and  blew  such  a  blast  that  the  whole  contents  of  the 
converter  went  flying  out  in  a  tornado  of  sparks.  The  air, 
it  must  be  remembered,  will  take  away,  first,  the  impurities 
in  the  iron,  and,  second,  the  iron  itself,  if  it  is  too  strong  or 
too  long  continued.  This  spectacular  failure  filled  the  two 

9 


THE   ROMANCE  OF   STEEL 

hundred  shopmen  with  delight.  For  days  you  could  hear 
in  all  parts  of  the  work  roars  of  laughter  at  "  Kelly's  fire- 
works." In  fact,  it  was  a  ten  years'  joke  in  the  iron  trade. 

In  a  few  days  Kelly  was  ready  for  a  second  trial,  this 
time  with  less  blast.  The  process  lasted  more  than  half  an 
hour,  and  was  thoroughly  unique.  To  every  practical  iron- 
maker,  it  was  the  height  of  absurdity.  Kelly  stood  coatless 
and  absorbed  beside  his  converter,  an  anvil  by  his  side  and  a 
small  hammer  in  his  hand.  When  the  sparks  began  to  fly, 
he  ran  here  and  there,  picking  them  up  and  hammering  them 
upon  his  anvil.  For  half  an  hour  every  spark  crumbled 
under  the  blow.  Then  came  one  that  flattened  out,  like  dough 
— proving  that  the  impurities  had  blown  out.  Immediately 
he  tilted  the  converter  and  poured  out  the  contents.  Taking 
a  small  piece,  he  cooled  it  and  hammered  it  into  a  thin  plate 
on  his  anvil,  proving  that  it  was  not  cast  iron. 

He  had  once  more  shown  that  cold  air  does  not  chill 
molten  iron,  but  refines  it  with  amazing  rapidity  if  blown 
through  it  for  the  proper  length  of  time.  His  process  was 
not  complete,  as  we  shall  see  later,  but  subsequent  improve- 
ments were  comparatively  easy  to  make.  Bessemer,  by  his 
own  efforts,  did  not  get  any  better  "  steel  "  in  1855  than  Kelly 
had  made  in  1847. 

For  this  exact  account  of  Kelly's  achievements,  I  am  in- 
debted to  Mr.  J.  H.  Geer,  who  was  his  helper  at  Johnstown, 
and  to  others  who  were  eyewitnesses  of  his  earlier  success  in 
western  Kentucky. 

KELLY'S  LATER  CAREER 

Kelly  remained  at  Johnstown  for  five  years.  By  this 
time  he  had  conquered.  His  patent  was  restored  to  him,  and 
Mr.  Morrell  and  others  bought  a  controlling  interest  in  it. 
He  was  now  honoured  and  rewarded.  The  "  crank  "  suddenly 
became  a  recognised  genius.  By  1870  he  had  received  thirty 

10 


BIRTH   OF   THE   BESSEMER    PROCESS 

thousand  dollars  in  royalties;  and  after  his  patent  was  renewed 
he  received  about  four  hundred  and  fifty  thousand  more. 
After  his  process  had  been  improved  and  widely  adopted, 
Kelly  spent  no  time  claiming  the  credit  or  basking  in  the  glory 
of  his  success.  No  man  was  ever  more  undaunted  in  failure 
and  more  modest  in  victory.  He  at  once  gave  all  his  atten- 
tion to  manufacturing  high-grade  axes  in  Louisville,  and 
founded  a  business  which  is  to-day  being  carried  on  at  Charles- 
ton, West  Virginia,  by  his  sons. 

When  more  than  seventy  years  of  age  he  retired  and  spent 
his  last  days  at  Louisville.  Few  who  saw  the  quiet,  pleasant- 
faced  old  gentleman  in  his  daily  walks  knew  who  he  was  or 
what  he  had  accomplished.  Yet,  in  1888,  when  he  died,  it 
was  largely  by  reason  of  his  process  that  the  United  States  had 
become  the  supreme  steel-making  nation  in  the  world.  He 
was  buried  in  the  Louisville  cemetery.  His  wife  is  still 
living. 

MUSHET    PERFECTS    THE    NEW    PROCESS 

The  new  process  was  perfected  by  a  third  inventor,  Rob- 
ert F.  Mushet,  a  Scotsman.  He  solved  a  problem  which 
had  baffled  both  Kelly  and  Bessemer — how  to  leave  just 
enough  carbon  in  the  molten  metal  to  harden  it  into  the  re- 
quired quality  of  steel.  Instead  of  frantically  endeavouring  to 
stop  the  process  at  exactly  the  right  moment,  Mushet  asked: 

"Why  not  first  burn  out  all  the  carbon,  and  then  pour 
back  the  exact  quantity  that  you  need?  " 

This,  too,  was  a  simple  device,  but  no  one  had  thought 
of  it  before.  Since  then  other  improvements  have  been  added 
by  Holley,  W.  R.  Jones,  Reese,  Gilchrist,  and  Thomas. 

The  new  metal  was  soon  called  by  the  name  of  "  Bessemer 
steel."  Strictly  speaking  it  was  not  steel  in  the  original  use 
of  the  word.  It  was  a  new  substance  very  much  like  wrought 
iron.  It  was  not  hard  enough  to  serve  for  all  purposes.  For 

ii 


THE    ROMANCE   OF   STEEL 

knives,  for  springs,  for  hammers,  for  a  thousand  finer  uses,  steel 
must  still  be  made  by  slower  and  more  careful  methods.  The 
Bessemer  product  does  the  rougher  work,  where  quantity  and 
cheapness  are  essential. 

It  is  probable  that  one  reason  for  the  naming  of  Bessemer 
steel  was  the  fact  that  true  steel  was  then  selling  at  three  hun- 
dred dollars  a  ton.  The  new  metal  might  have  been  less 
highly  esteemed  had  it  been  announced  merely  as  a  modified 
form  of  iron. 

THE    FIGHT    FOR    STEEL    PATENTS 

In  1870  both  Kelly  and  Bessemer  applied  to  the  United 
States  Patent  Office  to  have  their  patents  renewed.  The  com- 
missioner of  patents  refused  to  extend  Bessemer's,  stating  that 
he  had  no  right  to  a  patent  in  the  first  place,  but  Kelly's  was 
extended  for  seven  years,  on  the  ground  that  he  had  not  yet 
received  sufficient  remuneration  for  his  invention.  As  soon 
as  it  was  known  that  Kelly's  patent  was  to  be  renewed,  the 
patent  office  was  fairly  mobbed  by  objectors.  Never  before 
had  there  been  such  opposition  to  the  renewal  of  a  patent. 
The  steel-makers  and  the  railroad  men  united  in  a  chorus  of 
protest.  The  dread  of  paying  higher  royalties  drove  them  to 
attack  Kelly's  claims.  Bessemer,  whose  right  to  royalties  was 
now  at  an  end,  was  lauded  as  the  original  inventor,  while  Kelly 
was  vilified  as  an  interloper.  Out  of  this  opposition  sprang 
the  exaltation  of  Bessemer  and  the  belittling  of  Kelly,  which 
deprived  America  of  the  credit  for  one  of  the  world's  greatest 
inventions. 

Kelly's  claim  is  supported,  not  only  by  the  United  States 
Patent  Office,  but  by  the  most  eminent  authorities.  "  Kelly  in 
America,  Bessemer,  Mushet,  and  Goransson  in  Europe,  dis- 
covered and  developed  the  pneumatic  process  of  treating  pig 
iron,"  says  Robert  W.  Hunt,  the  veteran  steel  expert  of  Chi- 
cago. James  Park,  one  of  the  Pittsburgh  "  fathers  of  steel," 

12 


SIR    HENRY    BESSEMER 


Or  THE 

UNIVERSITY 

OF 


BIRTH    OF   THE   BESSEMER    PROCESS 

declared  that  "  the  world  will  some  day  learn  the  truth,  and  in 
ages  to  come  a  wreath  of  fame  will  crown  William  Kelly,  the 
true  inventor  of  the  Bessemer  process."  Even  an  English 
writer,  Zerah  Colburn,  records  that  "the  first  experiments  in 
the  conversion  of  melted  cast  iron  into  malleable  steel  were 
made  in  1847  by  William  Kelly."  And  the  greatest  living  au- 
thority on  the  history  of  American  iron  and  steel — James  M. 
Swank,  who  has  been  the  secretary  of  the  American  Iron  and 
Steel  Association  for  a  generation — says: 

"  Mr.  Kelly  claims  the  discovery  of  the  pneumatic  prin- 
ciple of  the  Bessemer  process  several  years  before  it  dawned 
upon  the  mind  of  Mr.  Bessemer,  and  the  validity  of  this 
claim  cannot  be  impeached." 

And  so,  Henry  Bessemer,  who  was  second  in  the  race,  re- 
ceived ten  million  dollars,  world-wide  fame,  and  knighthood; 
while  William  Kelly,  who  was  first,  received  half  a  million 
dollars  and  comparative  oblivion.  Kelly  was  not  to  any  de- 
gree embittered  by  his  country's  disregard  of  him.  He  had 
an  unwavering  conviction  that  everything  would  be  made 
right.  Shortly  before  his  death  he  said  to  his  children : 

"  The  day  will  come  when  some  one  will  do  me  justice." 

Mushet  fared  even  worse  than  Kelly.  For  him  there  was 
neither  fame  nor  money.  He  lost  his  patent  by  failing  to  pay 
the  necessary  fees,  and  the  steel-makers  joyfully  appropriated 
his  invention  without  any  fear  of  a  lawsuit.  In  his  later  years 
he  received  a  pension  of  three  hundred  pounds  annually  from 
Bessemer,  and  a  slight  public  acknowledgment  of  his  work. 
Very  little  is  known  of  Mushet.  He  will  doubtless  remain  one 
of  the  world's  unrecognised  and  unrewarded  benefactors. 

BESSEMER    AND    HIS    INVENTIONS 

As  a  matter  of  history,  the  names  of  Bessemer  and  Kelly 
should  be  linked  together  like  those  of  Washington  and  Jef- 

13 


THE   ROMANCE   OF    STEEL 

ferson.  The  original  idea  first  came  from  the  brain  of  Kelly, 
but  the  commercial  success  of  the  new  process  was  due  to 
Bessemer's  machinery,  perfected  for  him  by  Galloway  &  Com- 
pany, of  Sheffield.  Bessemer  was  one  of  England's  greatest 
inventors,  having  one  hundred  and  twenty  patents  to  his  credit. 
He  was  the  son  of  an  inventor — a  Frenchman  who  had  been 
driven  to  London  by  a  social  explosion  in  Paris.  He  began 
to  earn  his  living  by  engraving  labels  for  patent  medicines. 
He  invented  a  velvet  machine,  a  sugar-making  process,  a  glass- 
polisher,  a  ventilator,  a  bronze  powder  process,  and  so  forth. 
His  first  invention,  a  method  of  stamping  public  documents, 
was — so  he  considered — stolen  from  him  by  the  British  Gov- 
ernment. He  was  very  poor  at  the  time,  and  this  real  or  sup- 
posed injustice  made  an  indelible  mark  upon  his  character. 
Henceforward  he  was  bitterly  aggressive  in  the  protection  of 
his  rights. 

Seven  years  after  Kelly's  success  at  Eddyville,  Bessemer 
had  a  conversation  with  Napoleon  III.,  newly  become  Em- 
peror of  France.  The  latter  complained  that  the  metal  used 
in  making  cannon  was  of  poor  quality  and  expensive;  and 
at  his  suggestion,  Bessemer  at  once  began  experiments  in  Lon- 
don. "  I  had  very  little  to  unlearn  "  about  the  metallurgy  of 
iron,  he  admits.  After  a  few  months  he  finished  a  toy  cannon 
and  sent  it  to  the  emperor.  To  use  his  own  words,  in  1855, 
"  the  idea  struck  me  of  making  malleable  iron  by  introducing 
air  into  the  fluid  metal."  Later  in  life,  he  said  that  the  idea 
was  suggested  to  him  by  Nasmyth's  process  of  blowing  steam 
into  molten  metal.  Bessemer  was  quite  capable  of  originating 
the  idea  himself,  but  it  would  be  strange  if  in  eight  years  he 
had  not  heard  something  of  Kelly's  "  pneumatic  process."  It 
was  well  known  in  Cincinnati,  and  letters  passed  between  the 
iron  men  of  Cincinnati  and  England  every  week.  It  has  been 
suggested — but  apparently  there  is  not  a  particle  of  evidence 
to  substantiate  the  idea — that  the  two  English  iron-workers 


BIRTH   OF   THE  BESSEMER   PROCESS 

who  helped  Kelly  at  the  Suwanee  Works  may  have  carried  his 
secret  across  the  Atlantic. 

Bessemer  met  with  as  much  opposition  in  England  as 
Kelly  had  encountered  in  America.  Like  Kelly,  he  made 
nothing  for  years  but  "  encouraging  failures."  At  his  first 
demonstration,  the  blast  was  so  strong  that  it  blew  three- 
fourths  of  the  iron  out  of  the  converter.  When  he  read  a 
paper  before  the  British  Association  for  the  Advancement  of 
Science  on  "  The  Manufacture  of  Malleable  Iron  and  Steel 
Without  Fuel,"  every  British  steel-maker  roared  with  laughter 
at  the  "  crazy  Frenchman."  It  was  voted  not  to  mention  his 
"  silly  "  paper  in  the  minutes  of  the  association. 

WHAT  A  MODERN  CONVERTER  IS 

To-day  there  are  more  than  a  hundred  Bessemer  con- 
verters in  the  United  States,  breathing  iron  into  steel  at  the 
rate  of  eighteen  billion  pounds  a  year.  It  is  well  worth  a 
visit  to  Pittsburgh  to  see  one  of  these  tamed  Etnas  in  full  blast. 
Nothing  else  in  the  world  is  like  it.  As  we  shall  see,  one  look 
at  a  converter  transformed  Andrew  Carnegie  from  a  company- 
promoter  into  a  steel  man  for  life. 

To  describe  it  in  a  few  words,  a  converter  is  a  huge  iron 
pot  twice  as  high  as  a  man.  It  is  swung  on  an  axle,  so  that 
it  can  be  tilted  up  and  down.  Although  it  weighs  as  much 
as  a  battalion  of  five  hundred  men,  it  can  be  handled  by  a  boy. 
About  thirty  thousand  pounds  of  molten  iron  are  poured  into 
it;  and  then,  from  two  hundred  little  holes  in  the  bottom,  a 
strong  blast  of  air  is  turned  on,  rushing  like  a  tornado  through 
the  metal.  Millions  of  red  and  yellow  sparks  fly  a  hundred 
feet  into  the  air. 

The  converter  roars  like  a  volcano  in  eruption.  It  is  the 
fiercest  and  most  strenuous  of  all  the  inventions  of  man.  The 
impurities  in  the  iron — the  phosphorus,  sulphur,  silicon,  and 
carbon — are  being  hurled  out  of  the  metal  in  this  paroxysm 


THE   ROMANCE   OF   STEEL 

of  fury.  The  sparks  change  from  red  to  yellow;  then 
suddenly  they  become  white. 

"All  right!"  shouts  the  grimy  workman  in  charge. 

The  great  pot  is  tilted  sideways,  gasping  and  coughing 
like  a  monster  in  pain.  A  workman  feeds  it  with  several  hun- 
dred pounds  of  a  carbon  mixture,  to  restore  a  necessary  ele- 
ment that  has  been  blown  out.  Then  it  is  tilted  still  farther; 
its  lake  of  white  fire  is  poured  into  a  swinging  ladle  and 
slopped  from  the  ladle  into  a  train  of  huge  clay  pots,  pushed 
into  place  by  a  little  locomotive.  The  converter  then  swings 
up  and  receives  another  fifteen  tons  of  molten  metal,  the  whole 
process  having  taken  only  a  quarter  of  an  hour. 

THE  TITANS    OF    THE    STEEL    INDUSTRY 

The  iron  and  steel  business  has  always  developed  big  men; 
and  the  adoption  of  the  Bessemer  process  for  the  first  time 
made  it  possible  for  big  men  to  do  big  work.  It  ushered 
in  the  Titanic  Period  of  the  steel  trade.  The  men  and  the 
opportunity  arrived  together.  Foremost  among  these  Titans 
were  Captain  Eber  B.  Ward,  Abram  S.  Hewitt,  Dr.  C.  G. 
Hussey,  Daniel  J.  Morrell,  John  Fritz,  Henry  Chisholm, 
Alexander  L.  Holley,  Captain  William  R.  Jones,  B.  F.  Jones, 
and  Andrew  Carnegie.  It  was  this  group  of  men  who  began 
with  thousands  and  left  hundreds  of  millions — who  found 
feebleness  and  left  strength — who  took  a  fourth-rate  steel  busi- 
ness and  raised  it  to  international  supremacy.  They  were  the 
foundation  stones  upon  which  the  whole  massive  structure 
rests. 

The  first  capitalist  to  appreciate  the  Bessemer  process  was 
Captain  Eber  B.  Ward.  This  extraordinary  man,  whose  life 
was  a  crescendo  of  self-help,  may  be  called  the  pathfinder  of 
the  American  steel  trade.  He  made  the  first  commercial 
Bessemer  steel  at  his  Detroit  plant  in  1864,  and  in  the  following 

16 


CAPTAIN    EBER    B.    WARD 


BIRTH   OF   THE  BESSEMER   PROCESS 

year  he  produced  the  first  steel  rails  in  America  at  his  rolling- 
mill  in  Chicago.  Ward  was  the  son  of  a  poor  lighthouse- 
keeper.  When  he  was  nine  years  of  age  his  mother  died  and 
he  was  set  to  work  as  cabin-boy  in  a  shabby  little  schooner. 
By  the  time  he  was  full  grown  he  knew  everything  about  a 
ship  from  keel  to  flag,  and  had  bought  a  small  vessel  of  his 
own.  For  years  he  continued  to  buy  ships,  or  build  them, 
until  he  became  the  steamship  king  of  the  Great  Lakes. 
Then,  in  middle  life,  he  suddenly  flung  aside  his  prestige,  sold 
most  of  his  fleet,  built  furnaces  and  rolling-mills,  and  became 
the  first  of  the  steel  kings. 

WARD,    THE    FIRST   STEEL    MILLIONAIRE 

No  sooner  had  Ward  begun  to  make  and  sell  Bessemer 
steel  than  he  found  himself  plunged  into  a  patent  war.  He 
had  bought  the  Kelly  and  Mushet  patents,  but  the  complete 
Bessemer  process  was  threefold.  It  involved,  first,  the  use  of 
air  as  fuel,  originated  by  Kelly;  second,  the  addition  of  a  car- 
bon mixture,  originated  by  Mushet;  and,  third,  the  use  of  a 
tilting  converter  and  casting  ladle,  originated  by  Bessemer. 
Ward  had  two-thirds  of  the  patents,  and  was  opposed  by 
Alexander  L.  Holley,  who  had  bought  the  Bessemer  rights. 
Neither  could  make  steel  satisfactorily  without  infringing  on 
the  legal  rights  of  the  other.  Each  man  had  his  partners. 
With  Ward  were  Zoheth  S.  Durfee,  of  New  Bedford,  and 
Daniel  J.  Morrell,  of  Johnstown.  With  Holley  were  John 
F.  Winslow  and  John  A.  Griswold,  of  Troy. 

Here  we  come  against  one  of  the  most  puzzling  mysteries 
in  the  story  of  steel.  Ward  and  Durfee  were  both  shrewd, 
self-made,  aggressive,  wealthy  men.  They  possessed  a  two- 
thirds  control  of  a  process  which  has  since  that  time  produced 
more  than  three  billion  dollars'  worth  of  steel.  The  Kelly 
patent,  which  they  owned  completely,  did  not  expire  until 
1878.  It  was  not  likely  that  the  American  courts  would  up- 


THE   ROMANCE   OF   STEEL 

hold  the  claims  of  Bessemer.  Kelly  had  already  beaten  him 
in  the  patent  office,  and  did  so  again  in  1871.  Yet  at  the  close 
of  a  year's  wrangling  and  legal  cannonading,  the  Ward  forces 
suddenly  flew  the  white  flag,  and  surrendered  all  their  patents 
to  Holley  in  return  for  a  thirty  per  cent,  interest  in  the  con- 
solidation. It  was  apparently  a  case  of  the  dog  swallowing 
the  alligator. 

Mr.  Swank  suggests  that  Ward  and  his  partners  were 
obliged  to  sell  out  for  the  reason  that  the  Troy  capitalists  con- 
trolled the  Bessemer  machinery,  without  which  the  Kelly  and 
Mushet  patents  were  of  little  value.  But  this  explanation  does 
not  clear  up  the  mystery.  It  was  the  only  instance  in  his  long 
career  in  which  Ward  made  such  a  disastrous  bargain. 

When  Ward  died  of  apoplexy  in  1875  his  estate  was  valued 
at  $5,355,ooo.  But  he  had  years  before  lost  his  chance  of 
being  the  czar  of  steel.  He  was  a  man  of  strange  extremes 
— self-controlled  and  passionate;  shrewd  and  credulous; 
persistent  and  changeable.  President  Grant  wished  him  to 
become  Secretary  of  the  Treasury,  but  Ward  found  it  impos- 
sible to  disentangle  himself  from  his  business  affairs.  The 
bulk  of  his  great  fortune  went  to  his  wife  and  to  Clara  Ward, 
his  daughter,  widely  known  as  the  Princesse  de  Chimay. 

THE    SUCCESSORS    OF    CAPTAIN    WARD 

Winslow,  Griswold,  and  Morrell  now  became  the  "big 
three  "  of  the  American  steel  business.  They  had  a  monopoly 
much  more  complete  than  that  possessed  to-day  by  the  United 
States  Steel  Corporation.  Troy,  like  Detroit,  had  for  a  short 
time  the  hope  of  being  what  Pittsburgh  now  is — the  greatest 
steel  city  of  the  world.  It  produced  Bessemer  steel  ten  years 
before  Pittsburgh,  and  Winslow  and  Griswold  were  men  of 
enterprise  and  capital. 

As  for  Morrell,  he  deserves  to  be  called  the  founder  of 

18 


BIRTH   OF   THE   BESSEMER    PROCESS 


the  Johnstown  steel  business,  which  has  since  become  world 
famous.  "The  Cambria  Works  have  produced  more  great 
steel-makers  than  any  other  works  in  the  United  States,"  said 
Mr.  Carnegie  generously.  Morrell  was  a  man  who  wonder- 
fully blended  conservatism  and  progressiveness.  When  his 
directors  opposed  the  adoption  of  the  new  steel  process,  he 
stood  up  in  the  meeting  and  said: 

"  Gentlemen,  you  may  think  me  crazy,  but  if  you  will  pay 
me  the  book  value  for  my  stock,  I  stand  prepared  to  put  every 
cent  of  it  into  a  Kelly-Mushet  steel  plant." 

It  is  said  that  in  the  earlier  part  of  Mr.  Carnegie's  career 
he  proposed  to  make  Morrell  one  of  his  partners,  but  could 
not  obtain  the  latter's  consent. 

"  You  are  too  flighty,"  said  the  older  man  to  the  younger. 

THE  WORK  OF  ALEXANDER  L.   HOLLEY 

But  there  was  a  young  man  of  thirty-four  who  stood 
behind  the  "  big  three  "  —a  young  man  with  no  capital  except 
his  genius,  who  becomes  at  this  point  the  central  figure  in 
the  steel  drama,  Alexander  L.  Holley.  To  describe  Holley 
fairly  requires  not  only  words,  but  music  and  painting  and 
sculpture.  Handsome  as  a  Greek  god,  with  the  brain  of  an 
engineer,  the  heart  of  a  woman,  and  the  soul  of  a  poet,  Holley 
won  a  larger  share  of  the  love  and  respect  of  both  the  Ameri- 
can and  European  steel-makers  than  any  other  individual  has 
received,  before  or  since.  There  was  nothing  local  about 
his  work.  He  was  as  ubiquitous  as  a  spirit,  erecting  steel 
plants  at  Troy,  Chicago,  Joliet,  Pittsburgh,  Braddock,  Johns- 
town, Bethlehem,  Harrisburg,  Scranton,  and  St.  Louis.  He 
went  from  works  to  works  as  a  bishop  travels  his  diocese,  sug- 
gesting, correcting,  and  always  improving. 

It  was  Holley  who  made  the  Bessemer  process  easy  and  swift. 
It  was  he  who  made  possible  that  immense  production  which 


THE    ROMANCE    OF   STEEL 

has  amazed  the  world  and  clogged  Pittsburgh  with  millions. 
When  the  river  of  gold  that  flowed  into  the  steel  trade's  treas- 
ury suddenly  became  wider  and  deeper,  it  was  because  Holley 
had  been  at  work  enlarging  the  channel.  He  worked  out 
what  we  may  rightfully  call  the  American  plan  of  steel- 
making.  He  made  war  on  clumsiness.  He  taught  the  steel- 
men  what  they  had  never  known  before — the  value  of  a  second. 
His  personal  magnetism,  his  eloquent  tongue,  and  his  ready 
pen  made  him  an  ideal  instructor.  He  became  the  leader  and 
inspirer  of  a  body  of  young  men,  among  whom  were  Robert 
Forsyth,  John  E.  Fry,  George  Fritz,  Robert  W.  Hunt,  Owen 
Leibert,  P.  Barnes,  D.  N.  Jones,  and  William  R.  Jones.  Hoi- 
ley's  one  thought  was  that  "  America  must  be  first,"  and  the 
building  of  steel-mills  was  to  him  more  a  matter  of  patriotism 
than  of  business. 

For  two  decades  Great  Britain  led  the  world  in  the  making 
of  Bessemer  steel.  Then,  exactly  twenty-five  years  ago,  the 
United  States  forged  ahead  and  in  a  short  time  outclassed  all 
competitors.  The  sceptre  of  power  passed  from  Troy  to  Pitts- 
burgh, and  from  the  "  big  three  "  to  an  unknown  young  Scotch- 
man who  had  been  a  clerk  in  the  employ  of  the  Pennsylvania 
Railroad.  Dear  iron  had  been  replaced  by  cheap  steel.  Orrin 
W.  Potter  and  William  Chisholm  were  building  up  the  steel 
trade  in  Chicago;  Henry  Chisholm  had  established  it  in 
Cleveland;  Abram  S.  Hewitt  was  making  structural  steel  at 
Trenton;  Captain  "Bill"  Jones  was  beating  the  world's 
records  in  rail-making  at  Braddock;  and  the  American  iron 
and  steel  trade  was  at  last  upon  a  solid  footing,  after  more  than 
two  centuries  of  struggle  and  disaster. 

"BILL"  JONES  STEPS  UPON  THE  STAGE 

At  this  point  in  the  drama  of  steel  there  steps  upon  the  stage 
perhaps  the  most  interesting  figure  of  all  who  have  played  a 
part  in  it — Captain  William  R.  Jones.  It  was  "  Bill  "  Jones 

20 


BIRTH    OF   THE   BESSEMER    PROCESS 

who  took  the  invention  of  Kelly  and  Bessemer  into  his  strong 
hands  and  developed  it  into  one  of  the  wonders  of  the  world. 
It  was  his  work  that  gave  the  Carnegie  company  its  first  uplift 
from  among  a  mob  of  competitors.  It  was  his  amazing  record 
that  first  startled  England  and  left  it  far  in  the  rear. 

As  the  manager  of  a  steel  plant,  as  the  leader  of  a  vast 
body  of  workmen,  and  as  a  mechanical  genius,  it  is  safe 
to  say  that  Captain  Jones  has  never  had  a  superior.  If  he 
had  not  hammered  down  the  cost  of  steel  rails  with  mighty 
blows,  the  golden  stream  of  profits  might  never  have  been 
widened  into  the  Lake  of  Billions.  From  the  time  when  he 
wrecked  the  Catasauqua  schoolhouse,  because  the  teacher  had 
unjustly  whipped  one  of  his  boy  chums,  until  the  moment  of 
his  tragic  death,  the  life  of  Bill  Jones  was  packed  with  adven- 
ture and  romance;  yet  the  full  story  of  his  career  is  here  made 
public  for  the  first  time. 

His  father  was  a  poor  Welsh  pattern-maker,  the  religious 
and  intellectual  leader  of  the  Welsh  in  the  village  of  Cata- 
sauqua, Pennsylvania.  The  cottage  in  which  he  lived  is  still 
standing,  No.  315  in  a  row  of  "  company  houses."  The  prin- 
cipal man  in  the  village  was  David  Thomas,  who  has  justly 
been  called  "  the  father  of  the  American  iron  trade."  It  was 
he  who  successfully  introduced  into  this  country  the  manu- 
facture of  pig  iron  with  anthracite  coal,  and  the  "  hot  blast" 
furnace — the  latter  being  an  idea  which  originated  with  the 
Scottish  engineer  Neilson,  and  which,  with  its  great  saving  of 
fuel  in  the  smelting  of  ore,  marked  an  advance  in  the  making 
of  pig  iron  comparable  in  importance  to  Kelly's  invention 
in  the  field  of  steel.  Thomas  built  big  furnaces,  instead 
of  little  ones;  and  worked  powerfully  to  put  the  iron  trade 
upon  a  solid  footing  with  the  new  fuel.  In  1849  he  became 
the  employer  of  "  Billy"  Jones,  who  was  then  a  ten-year-old 
youngster,  with  a  local  reputation  for  recklessness  and  mis- 
chievousness. 

21 


THE   ROMANCE   OF   STEEL 

Among  the  men  who  knew  Captain  Jones  in  his  later  years 
only,  it  has  always  been  more  or  less  of  a  mystery  how  he 
acquired  his  unusual  command  of  language  and  knowledge  of 
classic  literature,  without  any  sort  of  regular  education.  The 
mystery  is  made  clear  by  the  fact  that,  like  Mr.  Carnegie,  Cap- 
tain Jones  had  access  to  a  library  and  made  good  use  of  it.  His 
father  had  a  hundred  and  fifty  volumes — the  largest  collection 
in  the  village.  They  were  mainly  historical  books,  such  as 
Plutarch  and  Josephus,  with  Shakespeare  and  other  miscel- 
laneous classics.  Billy,  when  not  robbing  hens'  nests  or  pelting 
stones  at  the  Irish  boys  at  the  other  end  of  the  hamlet,  was 
lying  prone  on  the  uncarpeted  floor  of  the  wooden  cottage, 
wrestling  with  the  long  words  in  one  of  his  father's  precious 
books.  Shakespeare  was  his  favourite  author — a  taste  which 
he  shared  with  General  Nathanael  Greene,  the  iron-maker 
patriot  of  the  Revolution. 

THE   PERSONALITY    OF   "  BILL "    JONES 

From  boyhood  Captain  Jones  was  absolutely  indifferent  to 
danger  or  pain.  Ethan  Allen,  who  sat  in  a  dentist's  chair  and 
had  a  good  tooth  extracted,  merely  to  give  encouragement  to 
a  timid  old  lady;  Paul  Kruger,  who  amputated  one  of  his  own 
thumbs  with  a  jack-knife ;  and  Captain  Jones,  who  when  a  boy 
cut  his  finger-nail  open  to  see  what  was  underneath — these 
three  may  be  compared  as  types  of  recklessness  and  hardihood. 
During  the  Civil  War,  in  which  he  fought  at  Fredericksburg, 
Chancellorsville,  and  the  storming  of  Fort  Fisher,  his  regi- 
ment came,  on  one  occasion,  to  a  river  that  had  to  be  crossed 
by  a  pontoon  bridge. 

"  Hanged  if  I'll  wait  for  a  bridge ! "  shouted  Jones,  plunging 
into  the  muddy  water  head  first. 

After  the  splash,  he  found  himself  in  about  two  feet  of  water, 
with  his  nose  split  from  top  to  tip.  Never  possessing  the 
slightest  degree  of  caution,  he  had  leaped  into  the  river  with- 

22 


BIRTH   OF  THE  BESSEMER   PROCESS 

out  thinking  of  its  depth.    To  him  the  only  consideration  was 
to  get  across. 

tWhen  he  was  eighteen,  he  ran  away  from  Catasauqua,  and 
amped  about  the  country,  finally  landing  in  Chattanooga, 
here  he  met  Miss  Harriet  Lloyd,  wooed  her  fervently,  and 
on  her.  His  first  job  after  marriage  was  in  the  Cambria 
Works,  at  Johnstown.  He  was  taken  on  at  two  dollars  a  day, 
and  soon  promoted.  He  and  William  Kelly  arrived  in  Johns- 
town about  the  same  time,  but  knew  little  of  each  other.  At 
that  period  there  seemed  nothing  in  common  between  the  quiet, 
thoughtful  Kelly  and  the  roistering  Jones,  yet  without  both 
types  of  men  there  would  have  been  no  billion-dollar  steel 
corporation. 

For  sixteen  years  Jones  remained  at  Johnstown,  gaining 
little  except  the  reputation  of  being  the  most  popular  sub-boss 
in  town.  Often  he  would  stop  work  and  take  all  his  men  to 
a  baseball  game  or  a  horse-race.  Fun  and  frolic  seemed,  until 
he  was  thirty-four,  to  be  the  only  aim  of  his  life.  Morrell, 
his  Quaker  employer,  would  have  discharged  him  if  it  had 
not  been  for  the  undeniable  fact  that  Jones  could  get  more 
work  out  of  a  gang  of  men  than  any  other  boss  in  the  iron 
business. 

When  George  Fritz,  manager  of  the  Cambria  Works,  died 
suddenly  in  1873,  Jones  stood  next  in  line  for  the  position;  but 
Morrell  considered  him  too  frolicsome  and  irresponsible,  and 
promoted  Daniel  N.  Jones  over  the  captain's  head.  Both 
Joneses  had  been  Catasauqua  boys,  and  the  two  were  good 
friends.  Bill  heard  the  news  first,  and  told  Dan. 

"  I'm  surprised,"  said  Dan;  "  I  was  sure  that  you  would  get 
the  place." 

"  So  was  I,  but  it  seems  not,"  replied  Bill. 

Dan  hesitated  a  moment,  and  then  said: 

"  Well,  you  are  entitled  to  it,  Bill,  and  I  won't  take  it." 

"  Yes,  you  must  take  it,"  answered  Bill.  "  The  company 

23 


THE   ROMANCE   OF   STEEL 

wants  you,  not  me,  and  it's  a  great  chance  for  you.  As  for  me, 
I'm  going  to  straighten  up,  go  somewhere  else,  and  show  them 
what  I  can  do." 

It  proved  to  be  the  turning-point  in  Captain  Jones'  career. 
From  that  moment  he  was  no  longer  an  irresponsible  youth, 
but  a  man  of  conscious  power  and  purpose. 

JONES   GOES  TO  THE  BRADDOCK   WORKS 

At  this  juncture  Andrew  Carnegie  enters  for  the  first  time 
into  the  story  of  steel.  It  was  the  terrible  panic  year,  and  he 
was  struggling  successfully  to  avert  bankruptcy  and  to  build 
his  first  steel  plant.  Up  to  this  date  he  had  made  iron,  but 
not  a  pound  of  steel.  Instead  of  being  the  first  maker  of  Besse- 
mer steel,  as  is  often  alleged,  the  fact  is  that  Mr.  Carnegie  was 
the  eleventh,  and  did  not  join  the  procession  until  nearly 
twenty  years  after  the  process  was  patented  by  Kelly  and 
Bessemer. 

Hearing  that  Captain  Jones  had  resigned,  Carnegie  not  only 
hired  him  as  superintendent  of  the  new  works  at  Braddock, 
near  Pittsburgh,  but  also  used  him  as  a  bell-wether  to  attract 
scores  of  the  highly  skilled  steel-workers  of  Johnstown.  This 
was  a  master-stroke,  as  skilled  Bessemer  steel-makers  were 
scarcer  at  that  time  than  four-leaved  clovers.  In  1875,  sur- 
rounded by  his  faithful  men  from  Johnstown,  Jones  began  to 
show  the  world  how  to  make  steel. 

Full  credit  must  be  given  to  the  English  steel-makers  for 
creating  a  market  for  steel  rails  by  fairly  forcing  them  on  the 
railroads.  Practically  the  whole  of  the  pioneer  educational 
work  among  American  railroad  men  was  done  by  English 
drummers.  In  1861,  for  instance,  a  Sheffield  agent  tried  to 
sell  steel  rails  to  the  president  of  the  New  York,  New  Haven, 
and  Hartford  road.  One  of  the  principal  directors  was  sitting 
in  the  room,  reading  a  newspaper.  He  looked  up,  and  with  a 
gesture  of  supreme  contempt,  exclaimed: 

24 


DANIEL    J.    MORRELL 


BIRTH   OF   THE  BESSEMER   PROCESS 

"Steel  rails!  Bosh!  Stuff!  Nonsense!  Humbug!" 
This  was  at  first  the  universal  reception  of  the  steel  rail 
agents.  Steel  rails  meant  a  larger  outlay  for  equipment,  and, 
for  a  time,  smaller  dividends.  However,  eight  years  after- 
ward, more  than  fifty  different  American  railroads  were  using 
steel  rails,  mainly  made  in  England,  the  Pennsylvania  being 
the  first  to  try  a  few  hundred  tons. 

When  Captain  Jones  "  straightened  up  "  and  joined  the 
Carnegie  forces,  the  United  States  was  a  buyer,  not  a  seller, 
of  steel.  England  made  as  much  iron  and  steel  in  four  months 
as  America  did  in  a  year.  Steel  rails  sold  for  one  hundred  and 
twenty  dollars  a  ton.  England  appreciated  the  Bessemer 
process  ten  years  sooner  than  the  United  States.  She  was  com- 
pelled to  do  so  by  the  commercial  enterprise  of  Sir  Henry 
Bessemer,  who  started  a  plant  of  his  own  and  cut  prices.  Great 
Britain  was  supposed  to  have  as  complete  control  of  the  steel 
trade  as  she  has  to-day  of  the  shipping.  She  was  the  iron  and 
steel  "  workshop  of  the  world,"  and  she  continued  to  be — until 
Bill  Jones  straightened  up. 

HOW  JONES  BROKE  ALL  THE  RECORDS 

In  his  first  fifteen  weeks  of  steel-making,  Jones  turned  out 
nearly  twice  as  much  as  any  one  had  made  before  with  a 
similar  equipment.  This  was  well  enough,  but  a  year  later  he 
made  more  steel  in  a  week  than  the  average  plant  had  been 
producing  in  six  weeks.  While  every  one  in  the  steel  world 
was  gasping  at  the  news,  Jones  took  a  fresh  grip  and  once  more 
doubled  his  output,  bringing  it  up  to  thirty-three  hundred  tons 
a  week. 

Several  years  before,  John  A.  Griswold  had  made  a  bet  with 
Holley  that  the  Troy  plant  could  not  produce  fifteen  hundred 
tons  a  month.  He  lost  his  money,  but  it  is  certain  that  even 
Holley  would  not  have  wagered  that  any  one  could  make  four- 

25 


THE   ROMANCE   OF   STEEL 

Second,  the  "  strong  but  pleasant  rivalry  "  between  different 
plants. 

Third,  the  employment  of  mixed  nationalties. 

Fourth,  the  eight-hour  day.  "  Flesh  and  blood  cannot  stand 
twelve  hours'  continuous  work,"  he  said. 

Fifth,  the  use  of  the  most  up-to-date  machinery. 

The  veteran  steel-makers  of  England  listened  to  the  paper 
in  dignified  silence.  At  its  close  the  president,  Mr.  J.  T. 
Smith,  rose  slowly  to  his  feet. 

"  Of  course,"  said  he,  "  when  this  man  speaks  of  making  one 
hundred  and  twenty-three  thousand  tons  in  ten  months,  he 
means  a  net  ton  of  two  thousand  pounds." 

"  No,"  replied  the  secretary.  "  He  means  a  gross  ton  of 
twenty-two  hundred  and  forty  pounds.  I  have  also  received 
a  letter  from  Captain  Jones,  saying  that  since  this  paper  was 
written  he  has  beaten  his  record  by  thirty-three  tons  a 
week." 

Again  there  was  silence;  then  another  member  rose. 

"Working  with  such  reckless  haste,"  he  said,  "his  steel 
is  certain  to  be  variable  and  inferior." 

"On  the  contrary,"  replied  the  secretary,  "Mr.  Jones  says 
that  the  average  variation  is  not  more  than  one  degree  from 
the  quality  aimed  at." 

There  was  nothing  more  to  be  said,  and  the  meeting 
adjourned. 

Six  months  later  the  steel-makers  of  England  met  again, 
and  a  second  paper  from  Captain  Jones  was  read.  Sir  Henry 
Bessemer  was  present,  but  made  no  comment  on  Jones'  an- 
nouncement that  Braddock  was  making  steel  faster  than  ever. 
Holley  opened  the  discussion,  and  in  a  friendly  way  put  the 
British  ironmasters  on  the  gridiron  for  fifteen  mintues.  He 
pointed  out  that  the  average  British  ironworker  produced 
four  hundred  and  twenty  tons  of  iron  a  year,  while  the 
American  worker  produced  five  hundred  and  fifty-five. 

28 


BIRTH   OF   THE   BESSEMER    PROCESS 

"  Our  steel,  made  quickly,"  said  he,  "  is  the  same  quality 
as  your  steel,  made  slowly.  You  increase  your  output  by 
making  more  machinery  of  the  same  kind,  while  we  increase 
ours  by  making  a  new  machine.  Of  course,"  continued 
Holley,  smiling,  "  as  my  capital  is  invested  in  America,  and 
not  in  England,  I  regard  these  English  habits  with  resigna- 
tion, even  with  cheerfulness."  His  genial  criticism  was 
received  in  silence.  No  one  answered.  It  was  unanswerable. 
The  star  of  the  steel  empire  had  moved  westward. 

JONES  AND   HIS   "BIG   SALARY" 

Among  all  the  partners  and  employees  of  the  Carnegie 
Company,  Jones  earned  the  most  and  received  the  least.  This 
was  largely  his  own  fault,  as  he  refused  to  be  a  shareholder. 

"No,  Mr.  Carnegie,  I'm  much  obliged,"  said  he  when 
he  was  offered  a  partnership.  "  I  don't  know  anything  about 
business,  and  I  don't  want  to  be  bothered  with  it.  I've  got 
trouble  enough  here  in  these  works.  I'll  tell  you  what  you 
can  do"  —these  were  his  exact  words — "you  can  give  me  a 
hell  of  a  big  salary." 

"  After  this,  captain,"  replied  Carnegie,  "  you  shall  have 
the  salary  of  the  President  of  the  United  States — twenty-five 
thousand  dollars."  This  sounded  well,  but  in  a  short  time 
the  President's  salary  was  scarcely  pin-money  compared  to 
the  amounts  that  were  yearly  shovelled  into  each  shareholder's 
pocket. 

When  the  writer  asked  for  an  estimate  of  Jones'  work  from 
James  Gayley,  the  first  vice-president  of  the  Steel  Trust,  Mr. 
Gayley  replied  emphatically: 

"  You  can  say  that  Captain  Jones,  through  his  mechanical 
contributions  to  the  development  of  the  steel-making  industry, 
accomplished  fully  as  much  as  Mushet  or  Sir  Henry  Bes- 


semer." 


29 


THE   ROMANCE   OF   STEEL 

The  famous  "  scrap-heap  "  policy  was  originated  by  Jones. 
He  did  not  believe  in  waiting  until  his  machinery  was  worn 
out.  The  moment  that  an  improvement  was  invented,  the 
old  machinery  was  dragged  to  the  scrap-heap,  and  the  latest 
devices  put  in  its  place.  He  made  the  shareholders  gasp  on 
several  occasions  by  asking  permission  to  smash  up  half  a 
million  dollars'  worth  of  machinery  that  was  as  good  as  new, 
but  outgrown.  They  were  wise  enough  to  give  him  a  free 
hand,  and  to  buy  him  whatever  he  ordered. 

Practical  suggestions  flashed  from  Jones  like  sparks  from 
his  converters. 

"See  here,  why  can't  we  armor-plate  that  hose?"  he  asked 
one  day.  "  Get  a  coil  of  wire  anpl  wind  it  around  the  hose 
to  keep  it  from  bursting." 

This  idea,  which  has  been  generally  adopted,  was  simple 
enough;  but  millions  of  people  had  looked  at  hose  without 
thinking  of  it. 

His  greatest  invention  is  known  by  the  name  of  the  Jones 
mixer.  This  is  a  monster  iron  box,  brick-lined,  capable  of 
holding  half  a  million  pounds  of  melted  metal.  Into  it  is 
poured  the  molten  iron  from  different  furnaces,  so  that  it 
may  be  mixed  and  made  uniform  in  quality.  A  train  of 
small  iron  cars,  or  ladles,  steams  up  alongside  of  the  mixer, 
each  ladle  full  of  sparkling,  splashing  metal.  The  mixer 
lies  lower  than  the  track,  and  the  cars,  one  by  one,  are  tipped 
over  so  that  they  spill  their  load  into  its  wide  mouth.  Then 
it  is  rocked  to  and  fro,  like  the  cradle  of  a  sun  god,  until 
its  contents  are  thoroughly  homogeneous,  when  they  are  sent 
on  their  turbulent  way  to  the  converter. 

"  The  Jones  mixer  was,  and  still  is,  invaluable  to  us,"  said 
James  Gayley — a  fact  which  was  shown  two  years  ago,  when 
the  Steel  Trust  secured  an  injunction  to  prevent  one  of  its 
competitors  from  using  the  device. 


30 


BIRTH   OF   THE  BESSEMER   PROCESS 

JONES  AS  A  LEADER  OF  MEN 

Kelly  lived  in  a  world  of  ideas;  Ward,  in  a  world  of 
money;  Holley,  in  a  world  of  scientific  knowledge;  and 
Jones  in  a  world  of  men.  Iron  and  human  nature  were  his 
raw  materials.  He  put  the  two  together  and  made  steel. 

"  It  wasn't  the  chemists  and  the  scientists,  mainly,  who 
developed  the  steel  business,"  said  the  veteran  John  Fritz 
to  the  writer.  "  It  was  the  practical  man  who  stood  among 
his  workmen  and  hammered  everything  out  inch  by  inch  in 
the  shops." 

Cromwell  showed  no  greater  generalship  in  handling  his 
invincible  Ironsides  than  Captain  Jones  displayed  in  drilling 
his  iron-workers.  He  was  an  absolute  monarch  of  his  big 
steel  works,  but  a  just  monarch,  who  rewarded  only  the  good 
and  punished  only  the  bad. 

Nothing  escaped  his  notice.  Every  day,  as  he  stormed  up 
and  down  the  shops,  his  talk  ran  on  in  this  fashion : 

"Do  you  get  enough  fresh  air  in  that  corner,  Joe?  I'll 
have  a  window  put  in  for  you." 

"See  here,  Smith!  If  you  don't  pay  your  honest  debts  you 
can't  work  for  me  any  longer.  You  go  and  settle  up  with  that 
grocer,  or  I'll  find  out  why!" 

"Shove  'er  along,  boys!  All  together!  Do  you  want  to 
get  licked  by  those  Joliet  farmers?" 

"Say,  Jim!  When  you're  going  home  to-night,  take  this 
piece  of  paper  and  give  it  to  Jack  Sullivan's  wife.  Jack  died 
in  the  hospital  last  night,  and,  confound  it,  she's  got  five 
children!" 

The  "piece  of  paper"  would  usually  be  a  deed  to  the 
cottage  in  which  the  bereaved  family  lived. 

"There  are  many  Braddock  widows  that  don't  forget 
Captain  Jones,"  said  the  old  doorkeeper. 

He  scattered  his  thousands  with  a  free  hand  among  his 

31 


THE    ROMANCE    OF   STEEL 

men  and  their  families,  and  accumulated  comparatively  little 
for  himself.  He  was,  in  short,  an  ideal  captain  of  industry, 
leading  his  men  on  to  victory  after  victory.  He  was  hot- 
tempered  and  rough.  Under  the  excitement  of  the  moment, 
he  would  often  sweep  down  upon  everything  in  his  way  with 
the  velocity  of  a  tornado,  discharging  his  best  men,  and  hurl- 
ing anathemas  right  and  left.  But  the  sky  soon  cleared. 
The  discharged  men  would  be  put  back.  Jones  was  as  trans- 
parent as  the  day,  and  as  ready  to  end  a  quarrel  as  to 
begin  one. 

On  the  day  after  the  Johnstown  flood,  he  took  three  hun- 
dred of  his  men  and  at  his  own  expense  brought  them  to 
the  wrecked  city,  where  they  worked  for  two  weeks  to  restore 
the  property  that  had  been  destroyed.  Others  sent  money 
and  sympathy,  but  Jones  gave  himself.  That  was  his 
way. 

He  was  as  quick  to  resent  as  he  was  to  forgive.  "  I  carried 
a  revolver  for  two  years  to  protect  myself  from  Bill  Jones," 
admitted  a  wealthy  coal  operator  —  one  of  Pittsburgh's 
foremost  Presbyterians.  "  It  was  this  way,"  he  continued. 
"  Carnegie  was  the  first  man  to  start  Sunday  work  in  this 
region.  I  was  opposed  to  it,  and  told  Jones  so.  We  quar- 
relled. Soon  afterward  I  heard  that  he  had  threatened  to 
'put  a  head'  on  me  the  next  time  we  met.  He  was  much 
stronger  than  I  was,  so  I  carried  a  revolver  to  defend  myself. 
Nine  months  before  his  death,  he  came  to  me  one  morning 
and  said  frankly:  'Well,  you  were  right  and  I  was  wrong 
about  that  Sunday  work.  If  I  had  my  life  to  live  over  again, 
I  wouldn't  run  a  mill  on  Sunday.'  Several  times  after  that 
he  came  to  the  little  Sunday  School  of  which  I  was  the  super- 
intendent, and  always  left  a  five-dollar  or  ten-dollar  bill  on 
the  collection  plate." 

Jones'  blue  eyes  looked  every  man  and  every  difficulty  full 
in  the  face.  Sham,  trickery,  and  meanness  he  despised. 

32 


CAPTAIN    WILLIAM    R.    JONES 


BIRTH   OF   THE   BESSEMER    PROCESS 

HOW  JONES   MET  HIS  DEATH 

Jones  died  as  he  had  lived — in  the  midst  of  an  industrial 
battle,  at  the  head  of  his  men.  He  was  killed  on  the  firing- 
line.  In  1889  one  of  the  Braddock  furnaces  had  been  work- 
ing badly.  Its  contents  had  "bridged,"  just  as  a  raft  of  logs 
will  jam  in  a  narrow  part  of  a  river.  A  squad  of  men  were 
trying  to  break  the  "bridge,"  Jones,  as  always,  being  in  front. 
Suddenly  it  broke,  and  the  fiery  contents  crashed  through 
the  outer  wall  of  the  furnace,  falling  directly  on  the  head 
and  shoulders  of  Captain  Jones.  He  sprang  forcibly  back- 
ward and  fell  into  a  pit,  striking  his  head  upon  the  iron  edge 
of  a  car.  One  of  his  workmen,  a  Hungarian,  fell  beside  him 
and  was  instantly  killed. 

The  next  day  Jones  died  in  the  hospital,  having  never 
regained  consciousness.  His  burns  were  severe,  but  probably 
would  not  have  caused  his  death,  as  he  was  a  man  of  amazing 
vitality.  Mr.  Gayley,  from  whom  this  account  of  Captain 
Jones'  death  has  been  obtained,  stood  at  his  side  when  the 
treacherous  furnace  broke,  and  narrowly  escaped. 

The  five  thousand  workmen  at  Braddock  were  frantic  with 
grief.  Never  before  or  since  has  the  iron  and  steel  world 
had  so  great  a  sorrow.  Carnegie,  looking  upon  poor  Jones 
as  he  lay  in  the  hospital,  sobbed  like  a  child.  Ten  thousand 
wet-eyed  men  marched  with  him  to  his  grave,  and  to-day 
the  veteran  steel-maker's  most  precious  memory  is: 

"  I  worked  with  Bill  Jones." 


33 


CHAPTER   II 

THE   DISCOVERY   OF  THE   GREAT   ORE 

RANGES 

The  Small  Beginnings  of  the  Iron  Industry  in  America — How  Its  Marvellous 
Modern  Expansion  Was  Made  Possible  by  the  Discovery  of  the  Vast 
Ore  Ranges  of  Lake  Superior — The  Story  of  a  Billion-Dollar  Wilderness. 

FEW  Americans  realise  that  in  the  development  of  the 
iron  and  steel  business,  we  took  our  place  in  the  kinder- 
garten class  with  the  oldest  nations  of  Europe  and 
Asia. 

We,  too,  carried  iron  ore  in  baskets  and  made  steel  by  the 
spoonful.  We  began  at  the  bottom.  No  furnace  that  you 
may  find  in  darkest  Africa  can  be  more  primitive  than  many 
that  were  in  operation  in  the  thirteen  colonies.  What  wan- 
dering tribe  on  the  Congo  could  produce  a  cruder  iron-works 
than  the  hollow  stump  furnaces  of  the  first  Arkansas  settlers? 
What  houses  have  ever  been  more  destitute  of  iron  than  the 
log  cabins  that  led  the  way  for  the  westward  march  of  the 
American  people?  What  outfit  could  be  more  primitive  and 
flimsy  than  the  early  American  forges,  which  were  tied  to 
trees  to  save  them  from  freshets,  or  the  spring-pole  hammers 
that  struck  upon  stump  anvils? 

Six  centuries  ago  there  was  not  a  blast  furnace  in  the  world 
that  would  be  looked  upon  as  anything  more  than  a  toy  by 
an  iron-maker  to-day.  At  the  time  when  our  Lynn  Puritans 
were  making  fourteen  thousand  pounds  of  iron  a  week,  Shef- 
field, the  chief  steel  city  of  England,  was  no  more  than  a  vil- 
lage, though  its  cutlery  had  been  famous  for  three  hundred 
jears,  Merthyr  Tydvil,  the  first  iron  metropolis  of  Wales, 

34 


DISCOVERY   OF   GREAT   ORE   RANGES 

was  a  bleak  and  unproductive  waste.  And  as  for  Essen,  the 
home  of  Krupp,  it  was  a  farming  hamlet  until  after  the  Presi- 
dency of  Jefferson.  The  simple  slitting-mill,  by  which  sheets 
of  iron  were  cut  into  strips,  was  not  used  in  England  until  a 
hundred  years  after  the  discovery  of  America;  and  the  ink 
on  the  Declaration  of  Independence  was  seven  years  dry 
before  the  first  rolling-mill  in  the  world  was  in  operation. 

The  early  American  iron-makers  had  little  to  do  with 
millions.  There  was  more  of  love  and  excitement  than  of 
money  in  the  trade.  In  fact,  iron  was  first  discovered  in  this 
country  through  a  royal  romance.  Ninety  years  after  the 
voyage  of  Columbus,  Queen  Elizabeth  of  England  fell  in 
love  with  Sir  Walter  Raleigh  and  gave  him  a  grant  of  land 
on  the  coast  of  North  Carolina.  Sir  Walter  sent  an  expe- 
dition to  explore  his  new  possessions,  and  a  learned  historian 
named  Harriot,  who  was  one  of  the  party,  reported  on  his 
return  that  "  iron  is  found  in  many  places  of  the  country." 

This  was  the  earliest  discovery  of  iron  in  the  New  World. 
In  1608  a  ship  arrived  at  London  with  a  load  of  ore — the  first 
tiny  pinch  from  the  vast  ore-fields  of  America — which,  when 
smelted,  produced  seventeen  tons  of  iron,  worth  twenty 
dollars  a  ton.  The  total  value  of  the  first  year's  business  was 
three  hundred  and  forty  dollars. 

THE   FALLING  CREEK   MASSACRE 

Stimulated  by  this  little  pile  of  iron,  a  company  was 
formed,  and  John  Berkeley  was  sent,  with  twenty-two  skilled 
iron-workers,  to  build  the  first  iron-works  on  the  new  con- 
tinent. Berkeley  was  "  a  gentleman  of  honourable  family," 
whose  home  was  Beverstone  Castle,  Gloucestershire.  The 
company  gave  him  a  free  hand,  with  permission  to  spend  as 
much  as  two  hundred  thousand  dollars.  He  chose  a  site  near 
the  James  River,  in  Virginia,  sixty-six  miles  above  James- 

35 


THE   ROMANCE   OF   STEEL 

town,  and  there,  in  the  dense  forest,  a  little  settlement  called 
Falling  Creek  was  built.  Iron  was  made,  and  the  prospects 
of  the  company  were  bright.  Then,  in  less  than  a  year  after 
their  arrival,  came  the  terrible  Indian  uprising  of  1622.-  The 
friendly  Powhatans  suddenly  became  fiends.  Whole  com- 
munities were  destroyed.  In  Falling  Creek  no  one  escaped 
except  the  young  son  of  John  Berkeley,  and  the  iron-works 
was  burned  down. 

To-day  Falling  Creek  swirls  down  to  the  James  River, 
and  on  its  bank  you  can  still  find  small  pieces  of  furnace 
cinder.  Two  miles  up  the  creek  are  the  ore-pits,  still  five  or 
six  feet  deep.  Half  a  mile  southward  from  the  site  of  the 
furnace  there  is  a  low  tract  of  ground  which  the  farmers  call 
Iron  Bottom,  because  of  the  bog  ore  that  it  contains.  This  is 
the  only  name  that  survives  in  our  day  to  commemorate  the 
story  of  the  first  martyrs  of  American  industry, 

THE    HEROIC    PERIOD    OF    IRON 

For  five  generations  after  the  Falling  Creek  massacre,  the 
Indians  were  the  most  dreaded  enemies  of  the  iron-workers. 
In  that  "  heroic  period,"  as  it  may  be  called,  the  guns  stood 
always  beside  the  furnace  and  the  anvil.  Those  who  travel 
to-day  through  the  secluded  valleys  of  Virginia  will  still  see 
the  ruins  of  historic  furnaces.  In  fact,  there  are  few  States 
of  the  original  thirteen  in  which  you  will  not  find,  always 
by  the  side  of  a  river,  the  crumbled  wreck  of  a  furnace  that 
made  iron  before  this  republic  was  born. 

The  first  colonial  iron-works  of  any  importance  was  estab- 
lished at  Lynn,  Massachusetts,  in  1642.  Eleven  "  English 
gentlemen,"  mostly  military  officers,  supplied  the  capital, 
which  was  only  five  thousand  dollars ;  and  a  son  of  Governor 
Winthrop  furnished  the  political  "  pull."  The  latter  was  the 
company's  chief  asset.  Every  special  privilege  young  Win- 

36 


OFTHE 

UNIVERSITY 

OF 


DISCOVERY   OF   GREAT   ORE   RANGES 

throp  could  suggest  seems  to  have  been  promptly  granted,  the 
most  important  being: 

A  monopoly  of  iron-making  in  Lynn  for  twenty-one  years. 

Exemption  from  taxation  for  twenty  years  and  from  all 
military  service. 

A  free  gift  of  three  square  miles  of  land  for  every  furnace 
built,  and  of  all  necessary  ponds  and  waterways. 

Permission  to  sell  to  Indians  and  to  enemies  of  the  British 
government. 

The  granting  of  so  many  special  privileges  angered  the  Lynn 
Puritans,  and  they  began  a  series  of  persecutions  that  finally 
harried  the  iron  men  out  of  business.  They  declared  that  the 
company  was  in  league  with  the  pirates,  and  raged  because 
it  destroyed  the  forests.  Several  farmers  brought  suit  on  the 
ground  that  its  dam  had  flooded  their  fields;  and  a  mob  went 
by  night  and  cut  away  the  flood-gates.  The  wife  of  John 
Gifford,  the  unpopular  agent  of  the  company,  was  next 
charged  with  being  a  witch,  and  narrowly  escaped  the 
penalty. 

Three  of  the  chief  iron-makers — Joseph  Jenks,  Richard 
Leader,  and  Thomas  Dexter — were  constantly  in  hot  water 
because  of  their  sturdy  independence  and  outspoken  opinions. 
Jenks  was  arrested  and  plagued  until  he  fled  to  Rhode  Island, 
where  Roger  Williams  had  established  a  more  tolerant  form 
of  faith.  Leader  was  fined  fifty  pounds  for  speaking  too 
frankly  of  the  officials  of  the  colony;  and  as  for  Dexter,  his 
whole  career  was  a  struggle  against  Puritanical  disfavour.  He 
was  fined  eight  pounds  for  "speaking  seditious  words,"  de- 
prived of  his  vote,  put  in  the  stocks,  bound  over  to  keep  the 
peace,  arrested  for  drunkenness,  for  assaulting  Captain  John 
Endicott,  and  for  sleeping  in  church,  and  at  last  deprived 
of  the  greater  part  of  his  hard-earned  property. 

John  Jenks  was  the  most  notable  of  the  Lynn  iron-workers. 
He  it  was  who  made  the  first  American  saw-mill,  the  first 

37 


THE   ROMANCE   OF   STEEL 

fire-engine,  the  first  wire,  and  the  dies  for  the  famous  "pine- 
tree  money,"  the  earliest  coinage  minted  in  the  colonies.  One 
of  his  achievements  alone  entitles  him  to  fame — the  invention 
of  the  scythe.  Before  his  day  all  the  grain  in  the  world  was 
cut  by  the  little  hand-sickle.  No  iron-worker  or  farmer  had 
thought  of  any  quicker  way.  "Why  not  make  the  blade 
straight  and  twice  as  long,  and  swing  it  with  a  two-handed 
handle?"  This  was  the  question  asked  and  answered  by 
Jenks.  Simple  enough,  perhaps,  but  since  the  first  blade  of 
wheat  was  grown  no  one  had  suggested  such  an  idea  before. 

THE    ARISTOCRATIC    PERIOD    OF   IRON 

Following  the  heroic  period  came  what  we  may  term  the 
aristocratic  period,  when  iron  was  made  in  the  American 
colonies  by  King  Louis  XV.,  Queen  Anne,  the  Comte  de 
Frontenac,  Baron  de  Graffenried,  Baron  Stiegel,  Baron 
Hasenclever,  Sir  William  Keith,  and  "Lord"  Stirling.  For 
the  seventy  years  previous  to  the  American  Revolution  iron- 
making  was  an  aristocratic  hobby,  not  only  in  America,  but 
in  several  European  countries  as  well.  Peter  the  Great  had 
set  the  fashion  by  building  furnaces  in  the  Ural  Mountains, 
and  the  great  need  of  iron  for  military  purposes  led  others  to 
imitate  his  example. 

Queen  Anne  financed  an  iron-works  at  Fredericksville,  Vir- 
ginia, at  the  request  of  Governor  Spotswood,  who  hoped  that 
the  profits  would  help  to  pay  the  expenses  of  the  government. 
With  the  exception  of  the  small  plant  now  being  run  in 
connection  with  the  Rusk  Penitentiary,  in  Texas,  the  Fred- 
ericksville furnace  was  the  only  instance  of  state  socialism  that 
has  occurred  in  the  American  iron  and  steel  trade.  Unfortu- 
nately for  the  advocates  of  the  socialistic  theory,  the  enterprise 
was  a  failure  from  the  first.  It  flickered  along  for  several 
years  and  became  extinct. 

38 


DISCOVERY   OF   GREAT   ORE    RANGES 

Louis  XV.  of  France  began  unwisely  by  investing  a  large 
sum  of  money  in  a  bankrupt  plant  at  Three  Rivers,  Quebec. 
For  seventeen  years  his  iron-works  manufactured  pots,  kettles, 
stoves,  and  cannon — more  for  his  amusement,  very  likely, 
than  as  a  business  enterprise,  as  his  rascally  agents  pocketed 
all  the  profits.  It  became  the  property  of  the  British  crown 
in  1760,  after  Wolfe's  capture  of  Quebec,  and  remained  so 
for  ninety  years. 

But  the  iron-masters  who  deserve  most  notice  during  the 
aristocratic  period  were  four  "  highly  well-born "  Germans 
—Barons  Graffenried,  Stiegel,  and  Hasenclever,  and  Squire 
Faesch.  These  men  were  not  merely  investors  in  the  industry, 
but  men  of  force,  practical  ability,  and  great  enterprise. 
Baron  Stiegel,  especially,  was  an  inventive  genius,  and  one 
of  the  most  picturesque  figures  of  colonial  times. 

Graffenried  was  an  idealist.  Bringing  with  him  thirty- 
two  iron-workers,  he  landed  in  North  Carolina  and  founded 
the  village  of  New  Berne.  He  was  a  man  of  peace,  and 
hoped  by  emigration  to  escape  the  perils  and  brutalities  of 
war;  but  unfortunately,  like  John  Berkeley,  he  had  not  taken 
the  Indians  into  account.  The  little  settlement,  after  several 
contented  and  more  or  less  prosperous  years,  was  attacked  by 
the  Powhatans  and  destroyed.  The  baron  saved  his  life,  but, 
as  Governor  Spotswood  wrote,  "  he  was  much  discouraged." 

BARONS  STIEGEL  AND  HASENCLEVER 

Baron  Stiegel,  also,  was  a  dreamer  of  dreams  and  a  builder 
of  ideal  towns.  In  1750  he  sold  his  share  of  an  estate  in 
Germany  for  two  hundred  thousand  dollars  and  came  to 
Pennsylvania.  Falling  in  love  with  Elizabeth  Huber,  the 
pretty  daughter  of  an  iron-maker,  he  married  her  and  bought 
her  father's  furnace.  Several  hundred  German  workmen  gath- 
ered around  him,  and  the  town  of  Manheim  was  founded. 

39 


THE   ROMANCE   OF   STEEL 

Here  all  kinds  of  artistic  iron-work  and  glassware  were 
manufactured.  The  Stiegel  stove-plates  are  among  the  most 
interesting  relics  of  early  American  history,  many  of  them 
representing  such  Biblical  pictures  as  "  Cain  and  Abel," 
"Adam  and  Eve,"  "David  and  Goliath,"  and  so  forth.  The 
work  of  Baron  Stiegel,  in  short,  forms  a  link  between  the 
skilled  handiwork  of  the  Middle  Ages  and  the  modern 
American  iron  trade.  The  mediaeval  art  of  the  Rhine  crossed 
the  Atlantic  Ocean  and  flourished,  for  one  brief  generation 
only,  in  the  Pennsylvania  backwoods. 

The  third  of  the  German  barons  was  a  personality  of 
entirely  different  type.  Baron  Hasenclever  was  a  thorough 
man  of  business — the  Andrew  Carnegie  of  colonial  days. 
Ten  years  after  Stiegel's  arrival,  Hasenclever  went  to  Eng- 
land and  organised  a  company  to  produce  iron  in  America. 
Taking  two  hundred  workmen,  he  came  to  New  York,  bought 
fifty  thousand  acres  in  northern  New  Jersey,  and  went  to 
work  with  the  most  astonishing  enterprise.  In  two  years  he 
had  built  four  furnaces,  seven  forges,  ten  bridges,  thirteen 
dams,  and  more  than  two  hundred  buildings.  His  iron  wras 
pronounced  to  be  the  best  that  had  been  produced  in  this 
country,  and  he  was  manager  of  a  plant  worth  nearly  three 
hundred  thousand  dollars.  Then  he  was  swept  off  his  feet 
by  an  avalanche  of  trouble.  Some  of  his  partners  proved  to 
be  incompetent  or  dishonest  and  by  1769  he  was  declared 
bankrupt  and  forced  to  leave  the  country. 

TWO   GREAT    AMERICAN    NAMES 

There  were  in  this  period  two  humbler  iron-workers  who 
'deserve  special  attention,  not  because  of  their  achievements 
as  iron-masters,  but  because  they  carried  the  two  names  that 
have  been  most  highly  honoured  in  American  history.  They 
were  Captain  Augustine  Washington,  father  of  George 

40 


DISCOVERY  OP  GREAT  ORE   RANGES 

Washington,  and  Mordecai  Lincoln,  the  great-great-grand- 
father of  Abraham  Lincoln. 

George  Washington,  when  a  boy,  played  under  the  sparks 
of  Accokeek  furnace,  which  belonged  to  the  Principio  Iron 
Company,  of  Maryland,  but  which  was  located  on  his  father's 
land  across  the  Potomac  from  Mount  Vernon.  Captain 
Augustine  Washington  owned  one-sixth  of  the  furnace,  and 
received,  in  addition,  five  dollars  for  every  ton  of  iron  it 
produced.  He  was  much  more  than  a  holder  of  stock.  Twice 
he  visited  England  on  business  connected  with  the  furnace, 
and  on  his  last  visit  was  persuaded  to  become  the  active  man- 
ager of  the  business. 

As  for  Mordecai  Lincoln,  he  was  the  master  of  a  forge  in 
Bound  Brook,  New  Jersey,  in  1703,  from  whence  his  son 
John  pushed  westward  to  the  heart  of  the  Kentucky  forests. 

MEN   WHO   FOUGHT   WITH    WASHINGTON 

Coming  down  to  Revolutionary  times,  we  have  next  the 
"  patriotic  period  "  of  the  iron  trade.  As  might  have  been 
expected,  the  British  Government's  persistent  hostility  to  the 
industry  in  the  American  colonies  drove  practically  all  of 
the  iron  men  into  the  ranks  of  the  Revolutionists.  Among  the 
signers  of  the  Declaration  were  four  ironmasters — George 
Taylor,  Stephen  Hopkins,  James  Smith,  and  George  Ross. 
And  of  the  leading  officers  of  Washington's  army,  the  follow- 
ing twenty- four  were  from  the  furnace  and  the  forge: 

Colonel  Ethan  Allen;  General  Philip  Benner;  Colonel 
James  Chambers;  Captain  Robert  Coleman;  Colonel  Persifor 
Frazer;  Major-General  Nathanael  Greene;  Colonel  Christo- 
pher Greenup;  Colonel  Curtis  Grubb;  Colonel  Peter  Grubb; 
General  James  Irvin;  General  Thomas  Johnson;  General 
William  Lewis;  Colonel  Isaac  Meeson;  Colonel  Mathiot; 
General  Daniel  Morgan;  General  Rufus  Putnam;  Colonel 

41 


THE   ROMANCE   OF   STEEL 

Paul  Revere;  Major  Samuel  M.  Reynolds;  Captain  William 
Richards;  General  Arthur  St.  Clair;  General  William  Alex- 
ander, the  self-styled  Lord  Stirling;  Colonel  Joseph  Vaughn; 
Colonel  William  D.  Waples;  Colonel  Gardiner  H.  Wright. 

George  Washington  clearly  set  a  special  value  upon  the 
friendship  of  ironmasters,  and  upon  their  bluff,  outspoken 
honesty.  Among  his  generals  no  one  was  more  trusted  and  be- 
loved by  him  than  Nathanael  Greene,  the  Quaker  forgeman; 
and  during  that  winter  of  desperation  at  Valley  Forge,  the 
commander-in-chief  and  his  wife  lived  as  the  guests  of  a  cheer- 
ful, witty,  philosophical  ironmaster  named  Isaac  Potts.  Robert 
Erskine,  too — the  manager  of  a  New  Jersey  furnace,  who  be- 
came the  surveyor-general  and  geographer-in-chief  of  the 
Revolutionary  forces — was  one  of  Washington's  most  intimate 
friends.  At  Ringwood,  in  Passaic  County,  New  Jersey,  any 
one  who  wishes  may  still  see  Erskine's  grave,  and  above  it  the 
broken  stump  of  a  tree  that  was  planted  by  President  Wash- 
ington himself. 

THE    GREAT   CHAIN    AT    WEST    POINT 

From  an  iron-maker's  point  of  view,  the  greatest  achieve- 
ment during  the  patriotic  period  was  the  making  of  the  great 
West  Point  chain.  This  massive  chain,  which  has  probably 
never  had  an  equal  since  the  first  hammer  struck  upon  the  first 
anvil,  was  stretched  across  the  Hudson  River  at  West  Point 
to  prevent  the  British  fleet  from  making  a  second  attack  upon 
Kingston  and  Albany.  It  was  nearly  a  mile  in  length,  and 
weighed  almost  two  hundred  tons,  many  single  links  being  as 
heavy  as  an  ordinary-sized  man.  To  complete  it  in  six  weeks, 
sixty  men  hammered  day  and  night  at  seventeen  forges,  and 
the  cost  of  it  was  placed  at  four  hundred  thousand  dollars. 

"  The  great  chain  is  buoyed  up,"  writes  Dr.  Thacher,  "  by 
very  large  logs,  about  sixteen  feet  long,  pointed  at  the  ends 

42 


DISCOVERY   OF  GREAT  ORE   RANGES 

to  lessen  their  opposition  to  the  force  of  the  current.  The  logs 
are  placed  at  short  distances  from  each  other,  the  chain  carried 
over  them  and  made  fast  to  each  by  staples.  There  are  also 
a  number  of  anchors  dropped  at  proper  distances,  with  cables 
made  fast  to  the  chain,  to  give  it  greater  stability." 

No  British  ship  passed  this  iron  barrier.  With  its  aid, 
West  Point  became  the  strongest  military  post  in  America — 
so  strong  that  treachery  was  tried  where  force  of  arms  had 
failed.  When  Benedict  Arnold  was  plotting  the  surrender  of 
West  Point,  he  wrote  Andre  and  said:  "  I  have  ordered  that  a 
link  be  removed  from  the  great  chain  and  taken  to  the  smith 
for  repair."  The  chain,  however,  remained  in  place  till  the 
end  of  the  war,  and  links  of  it  are  still  to  be  seen  in  the 
museums  of  Albany,  West  Point,  Newburgh  and  New  York. 

"  PROTECTION  "  AGAINST  AMERICAN  IRON 

In  a  very  emphatic  sense  it  may  be  said  that  the  first  blow 
of  the  Revolution  was  struck,  not  by  the  swords  of  Bunker 
Hill,  but  by  the  tilting-hammers  of  the  colonial  ironmasters. 
Before  George  Washington  was  born,  the  iron  men  had  ham- 
mered out  a  Declaration  of  Independence — so  far  as  their  trade 
was  concerned,  at  least.  It  was  as  early  as  1719  that  the  omi- 
nous news  reached  England  that  there  were  six  furnaces  and 
nineteen  forges  in  America.  Six  furnaces  and  nineteen  forges! 
As  Bancroft  says,  "  they  were  a  terror  to  England,  and  their 
spectres  haunted  the  public  imagination  for  a  quarter  of  a 
century." 

The  British  ironmasters  clamoured  for  protection  against 
this  competition,  and  an  act  of  outlawry  and  confiscation  was 
passed  against  every  English-born  skilled  worker  in  the 
American  colonies.  This  did  more  to  irritate  the  colonial 
iron  men  than  to  suppress  their  business,  and  in  a  few  years 
England  was  frightened  again.  A  Pennsylvania  storekeeper 

43 


THE   ROMANCE   OF   STEEL 

was  on  a  visit  to  Liverpool  to  replenish  his  stock,  and,  on 
being  told  the  price  of  nails,  said: 

"  Why,  I  can  buy  better  nails  for  less  money  from  John 
Taylor,  of  Sarum,  Pennsylvania." 

A  loud  outcry  arose  against  "John  Taylor's  nails,"  and 
made  itself  heard  even  in  Parliament.  Lord  Chatham,  too, 
speaking  in  the  House  of  Lords,  declared  that  he  "would  not 
allow  the  colonists  to  make  even  a  hobnail  for  themselves." 

Finally,  in  1750,  the  British  Parliament  took  the  most  dras- 
tic action  against  the  enterprising  men  who  were  making  the 
colonies  industrially  independent,  and  issued  what  was  prac- 
tically an  injunction  against  the  iron  trade  of  America.  The 
five  points  of  this  injunction  were  as  follows : 

No  more  rolling  mills  to  be  built  in  America. 

No  more  slitting-mills. 

No  more  tilt-hammer  forges. 

No  more  steel  furnaces. 

American  pig  iron  to  be  taken  into  England  duty  free,  but 
at  the  port  of  London  only. 

This  injunction  had  a  different  effect  from  what  the  British 
Parliament  intended.  It  was  so  brutally  frank  that  it  opened 
the  eyes  of  the  colonists  to  the  real  nature  of  the  government's 
colonial  policy.  And  as  for  the  ironmasters,  the  last  spark  of 
loyalty  in  their  hearts  was  extinguished.  It  had  been  bad 
enough  to  be  classed  with  pirates  and  outlaws,  but  now  Par- 
liament had  called  every  one  of  their  forges  and  furnaces  a 
"  common  nuisance  "  that  must  be  "  abated."  This  was  too 
much.  Henceforth  every  forge  and  furnace  became  a  storm- 
centre  of  discontent,  and  the  iron-workers  were  ready  for  the 
Revolution  a  quarter  of  a  century  before  it  came. 

MRS.  LUKENS'  BOILER-PLATES 

After  the  Revolution,  the  first  notable  iron-maker  was  a 
woman — Mrs.  Rebecca  Lukens,  of  Coatesville,  Pennsylvania. 

44 


MRS.    REBECCA    LUKENS 


OF  THE 

UNIVERSITY 

OF 


DISCOVERY   OF   GREAT   ORE   RANGES 

She  was  the  first  in  America  to  roll  boiler-plates  successfully, 
and  she  laid  the  foundation  of  a  business  which  is  still  flour- 
ishing. Mrs.  Lukens  was  far  more  than  a  mere  owner.  She 
was  an  inventive,  practical  woman,  who  drove  the  business 
toward  success  in  the  face  of  tremendous  difficulties.  Her 
boiler-plates  became  so  famous  that  George  Stephenson  used 
them  in  the  building  of  his  first  locomotives. 

To-day,  when  over  two-fifths  of  all  the  iron  and  steel  in  the 
world  is  produced  in  this  republic,  it  is  hard  to  realise  that 
twenty-five  years  ago  we  were  lagging  behind  in  the  race. 
We  have  worn  the  blue  ribbons  of  victory  only  for  a  short 
time.  When  "  Bill  "  Jones  was  born,  England  made  as  much 
iron  in  one  day  as  we  did  in  five.  We  were  as  hopelessly  in 
the  rear  in  the  iron  and  steel  industry  as  we  are  to-day  in  that 
of  ship-building.  The  hampering  effect  of  that  political  and 
financial  chaos  which  prevailed  from  George  Washington  to 
Abraham  Lincoln,  and  the  lack  of  cohesion  between  the  States, 
allowed  England  to  take  the  lead  in  the  building  of  factories, 
in  steam  machinery,  in  railroads,  and  in  the  making  of  iron 
and  steel. 

American  civilisation,  prior  to  the  Civil  War,  was  too  flimsy 
to  sustain  a  great  industry.  Large  fortunes  could  be  made  only 
in  those  occupations  which  depend  primarily  upon  natural 
resources,  such  as  lumbering,  agriculture,  cattle-raising  and 
cotton-growing.  Every  backwoods  settlement  was  based  upon 
wood,  not  steel.  It  was  like  the  clumsy  ox-carts  of  the  Mani- 
toba half-breeds, — put  together  without  a  nail. 

As  late  as  1867  England  called  our  iron  and  steel  works, 
— "  sickly  hothouse  plants."  There  were  then  fifty-nine 
Bessemer  plants  in  Europe,  and  only  three  in  the  United 
States.  When  Henry  Chisholm  made  his  first  Bessemer  steel 
in  Cleveland,  he  was  obliged  to  import  workmen  from  Shef- 
field. Whether  rightly  or  wrongly,  American  steel  was  gen- 
erally supposed  to  be  of  unreliable  quality.  It  was  said  to 

45 


THE   ROMANCE   OF   STEEL 

be  made  in  a  hit-or-miss  fashion.  When  the  steel-makers  of 
Joliet,  in  1874,  produced  a  steel  rail,  twisted  when  cold  into 
a  perfect  spiral  without  a  break,  the  news  of  their  skill  was 
heard  with  incredulity  both  in  the  United  States  and  England. 
But  the  following  year  America  shot  ahead  of  Germany  and 
began  a  neck  and  neck  race  with  England,  which  continued 
until  1889.  After  that,  the  race  became  a  procession. 

In  the  Centennial  year  of  the  republic,  American  goods 
broke  into  the  English  market.  Henry  Disston,  the  Philadel- 
phia saw-maker,  cut  the  price  of  saws  to  $10.50  a  dozen  and 
sold  $100,000  worth  in  Europe  in  a  year.  American  axes  at 
eighty  cents  were  found  to  be  superior  to  English  axes  at 
a  dollar.  The  North  British  railroad  company  bought  an 
American  steam-shovel  for  $15,000, — the  first  of  its  kind 
ever  seen  in  England.  With  three  men  to  run  it,  it  threw 
sixty  shovellers  out  of  work.  The  unemployed  diggers  gath- 
ered around  it  in  open-mouthed  amazement  and  watched  it 
fill  a  waggon  in  fifty  seconds.  A  few  days  afterwards  an  Ameri- 
can merchant  arrived  in  Sheffield  with  a  consignment  of  hoes, 
hay-forks,  spades,  etc.,  which  were  neater,  handier  and  cheaper 
than  those  which  Sheffield  had  been  sending  to  all  parts  of 
the  world.  The  Sheffield  men  were  dumbfounded  at  such 
impertinence,  but  they  could  do  no  more  than  say, — "They 
won't  wear  as  well  as  they  look."  The  next  surprise  came 
when  an  American  locomotive  began  to  run  up  and  down 
on  one  of  the  English  railroads.  This  engine  attracted  gen- 
eral admiration  as  a  clever  piece  of  workmanship,  and  its  cost 
was  but  $6,700,  several  notches  below  the  English  price. 

Then,  in  the  same  year,  when  a  Sheffield  steel-maker  who 
had  lost  all  his  American  customers,  announced  publicly  his 
intention  of  building  a  branch  plant  at  Pittsburgh,  England 
realised  that  her  industrial  supremacy  was  beginning  to  slip 
away.  Five  years  later,  when  Captain  Jones,  the  Titan  of 
Braddock,  made  the  first  announcement  of  American  achieve- 

46 


DISCOVERY   OF   GREAT   ORE   RANGES 

merits  in  Great  Britian,  the  unwelcome  fact  was  slowly  driven 
deep  into  the  British  mind — the  thirteen  little  colonies  in  the 
American  wilderness  had  become  the  greatest  steel-making 
nation  in  the  world. 

At  the  close  of  the  Civil  War  we  had  enough  capital,  enough 
machinery,  enough  skill.  What  was  needed,  if  the  business 
was  to  expand,  was  cheaper  ore.  Before  the  Age  of  Steel 
could  begin,  there  had  to  be  more  ore — hundreds  of  millions 
of  tons  of  it.  Where  it  was  to  be  found,  none  of  the  steel- 
makers could  tell. 

THE   SECRET    OF   OUR   SUPREMACY    IN    STEEL 

If  the  claim  that  steel  has  made  a  thousand  millionaires 
seems  incredible,  what  shall  we  say  to  the  fact  that  in  the  Lake 
Superior  region  alone  the  value  of  the  known  deposits  of  iron 
ore  is  more  than  a  thousand  millions?  As  it  lies  in  the  ground, 
iron  ore  is  cheaper  than  sawdust.  You  can  buy  twenty  pounds 
for  a  cent.  But  in  the  dense  wilderness  that  girdles  Lake 
Superior  there  are  mountains  of  it,  prairies  of  it,  lying  red 
and  heavy  underneath  the  forest  soil.  How  this  billion-dollar 
wilderness  was  discovered  in  the  nick  of  time  to  give  us  the 
supremacy  of  the  world  in  steel — how  scores  of  vast  fortunes 
were  made  and  lost  and  made  again — we  shall  see  in  the  fol- 
lowing pages. 

It  is  impossible  to  understand  why  our  American  steel- 
makers hold  their  present  dominant  position  without  first 
knowing  the  story  of  this  wonderful  deposit  of  ore.  It  is  the 
secret  of  cheap  steel  and  American  supremacy.  Other  coun- 
tries can  use  the  same  skill  and  the  same  machinery.  Their 
furnaces  may  be  as  large,  and  their  coal  as  handy.  But  it  is 
in  the  United  States,  and  nowhere  else,  that  iron  ore  is  found, 
not  in  deep  mines,  but  in  vast  pockets,  in  heaps,  in  ranges,  on 
the  surface  of  the  earth,  ready  to  be  scooped  up  and  carried 
away. 

47, 


THE   ROMANCE   OF  STEEL 

As  to  what  iron  is,  nobody  knows. 

It  is  a  part  of  the  universal  mystery.  "  A  grand  piano  is  a 
very  simple  mechanism  compared  with  an  atom  of  iron,"  said 
a  famous  scientist.  It  is  found  more  or  less  in  all  parts  of  the 
earth.  By  means  of  the  spectroscope,  we  have  found  it  in  the 
stars.  The  meteorites  that  fly  through  space — perhaps  the 
cinders  of  exploded  planets — are  often  found  to  be  boulders 
of  iron  ore.  The  forty-ton  meteorite  which  Peary  brought 
from  the  Arctic  nine  years  ago,  and  which  lies  to-day  in  front 
of  the  New  York  Museum  of  Natural  History,  is  composed 
chiefly  of  iron.  Henry  M.  Howe  goes  so  far  as  to  say 
that  "  the  earth  may  be  an  enormous  iron  meteor,  covered  with 
a  thin  coating  of  rock."  Taking  this  as  true— that  our  earth 
is  a  round  iron  nugget — we  can  figure  that  its  cash  value  to 
any  Carnegie  of  the  Milky  Way  would  be  about  six  and  a 
half  septillions  of  dollars. 

Pure  iron  is  as  white  as  silver.  Expose  it  to  the  air  or 
water,  and  it  tans  with  rust,  as  the  oxygen  burns  it  up.  There 
is  iron  in  plants,  in  animals,  in  human  beings.  In  every  hun- 
dred people,  on  an  average,  there  is  a  pound  of  iron.  It  is  the 
iron  in  the  blood  that  imparts  strength  to  a  man's  arm  and 
the  blush  to  a  maiden's  cheek.  With  too  little  iron,  we 
sicken ;  without  any,  we  die.  For  some  reason,  which  is  still 
unknown  to  science,  iron  is  as  much  of  a  necessity  to  man's 
brain  and  body  as  steel  is  to  his  civilisation. 

High-grade  iron  ore  contains  as  much  as  sixty  per  cent,  of 
iron.  It  is  one  of  the  most  timid  of  metals.  It  hates  to  be 
alone.  Nothing  but  the  fiercest  of  furnace  fires  will  compel 
it  to  let  go  the  atoms  of  sulphur  and  phosphorus  which  are 
its  favourite  companions.  As  Mr.  Carnegie  said  to  me  jest- 
ingly on  one  occasion : 

"  Sulphur  and  phosphorus  are  the  little  yellow  devils  which, 
strangely  enough,  we  are  able  to  drive  out  by  means  of  fire." 

Until  fifty  years  ago,  our  iron  ore  came  from  the  Eastern 
S.tateSj  mainly  from  Pennsylvania  and  New  York.  The  fa- 


PHILO    M.    EVERETT 


OFTHE 

UNIVERSITY 

OF 

H\ 


DISCOVERY   OF  GREAT  ORE   RANGES 

mous  Cornwall  mines,  near  Lebanon,  Pennsylvania,  were  the 
richest  in  America.  They  remained  in  the  Grubb  and  Cole- 
man  families  for  more  than  a  hundred  and  fifty  years,  and 
yielded  nineteen  million  tons.  The  best  New  York  mines  were 
at  Port  Henry,  on  Lake  Champlain,  turning  out  fifteen  mil- 
lion tons  in  the  last  hundred  years.  Until  the  Civil  War,  there 
was  enough  ore  to  supply  the  demand.  Then  the  output  of 
iron  almost  doubled  in  three  years,  prices  were  trebled,  the 
tariff  was  raised,  and  the  railroad  boom  began. 


THE    SEARCH    FOR    IRON    ORE 

"We  must  have  more  ore,"  cried  the  excited  iron-makers, 
confused  by  this  unforeseen  rush  of  prosperity. 

The  answer  to  the  cry  came  from  the  far  western  end  of 
Lake  Superior — from  a  roadless,  houseless  wilderness,  inhab- 
ited only  by  the  bear,  the  moose,  the  wolf,  and  a  few  wander- 
ing tribes  of  the  Dakotas.  Strictly  speaking,  the  answer  came 
nearly  twenty  years  before  the  question,  but  as  usual  the  iron- 
makers  at  first  did  not  hear  it,  or  did  not  believe  it.  It  came, 
as  always,  from  an  unexpected  quarter  and  not  from  the  regu- 
lar authorities  on  the  subject.  "  Impossible!"  said  the  men 
of  technical  knowledge.  "  Absurd!  "  said  the  men  of  money. 
But  the  halloo  of  the  few  pathfinders  persisted,  until  one  by 
one  the  suspicious  men  of  iron  and  steel  began  to  follow  the 
rough  trail  that  led  to  boundless  wealth.  To-day  that  halloo 
has  become  a  "  Te  Deum,"  chanted  at  every  gathering  of  the 
American  Iron  and  Steel  Association. 

The  Christopher  Columbus  of  the  Lake  Superior  ore  region 
was  Philo  M.  Everett,  an  adventurous  citizen  of  Jackson, 
Michigan.  The  following  story  of  his  memorable  journey, 
which  deserves  to  be  ranked  with  the  ride  of  Paul  Revere, 
has  been  gleaned  from  manuscripts  loaned  by  Peter  White,  of 
Marquette,  the  only  survivor  of  those  heroic  days. 

In  the  spring  of  1845  Mr.  Everett  became  friendly  with  a 

49 


THE   ROMANCE   OF   STEEL 

couple  of  Indians — a  half-breed  named  Louis  Nolan  and  an 
old  chief,  Manjikijik,  who  offered  to  guide  him  to  "a  great 
mountain  of  solid  iron."  At  first  the  proposed  trip  was  laughed 
at  by  the  citizens  of  Jackson,  but  Everett  persevered  and  organ- 
ised a  company  of  thirteen  subscribers  to  supply  the  necessary 
funds.  In  spite  of  the  unfortunate  reputation  of  this  particu- 
lar number,  there  has  never  been  a  trip  that  was  luckier,  either 
for  them  or  for  the  nation. 

Taking  four  men  and  his  Indian  guides,  Everett  travelled 
north  to  Lake  Superior,  bought  a  small  sailing  skiff,  and 
coasted  westward. 

"  I  was  most  of  the  time  with  Indians  of  the  wildest  nature," 
he  says.  "  We  incurred  much  danger  and  hardship.  Some- 
times our  sails  would  not  flop,  and  in  fifteen  minutes  we  would 
have  a  gale,  the  seas  running  as  high  as  a  house.  We  were 
often  wet  for  days  together." 

After  six  weeks7  travel  by  water  and  land,  the  Indians  sud- 
denly stopped  and  pointed  to  a  distant  black  hill,  very  con- 
spicuous from  the  trail. 

"Iron  mountain!  Indian  not  go  near!  White  men  go!" 
said  the  Indians,  who  were  prevented  by  a  tribal  superstition 
from  venturing  near  the  spot. 

EVERETT'S  WONDERFUL  DISCOVERY 

The  white  men  went,  and  found  "  a  mountain  a  hundred 
and  fifty  feet  high,  of  solid  ore,  which  looked  as  bright  as  a 
bar  of  iron  just  broken."  Mr.  Everett  had  seven  permits  from 
the  Secretary  of  War,  each  one  giving  him  authority  to  lay 
claim  to  one  square  mile  of  ore  land.  He  located  his  claims, 
and  with  pockets  full  of  nuggets  the  little  party  made  its  peri- 
lous way  home. 

"  It  is  creating  a  great  excitement  here  and  in  Detroit,"  he 
writes.  "We  have  had  several  letters  from  the  brokers  in 

50 


DISCOVERY   OF   GREAT   ORE   RANGES 

Wall  Street,  applying  for  shares  in  our  company.  I  have  two 
hundred  shares  at  fifty  dollars  each,  but  I  am  not  anxious  to 
sell." 

Everett  and  his  twelve  partners  thought  they  had  discov- 
ered a  mountain  of  solid  iron,  enough  to  supply  the  whole 
world  to  the  end  of  time. 

"  We'll  pay  five  dollars  apiece  for  every  stone  that  can  be 
found  on  our  iron  mountain,"  said  one  of  the  enthusiastic 
shareholders. 

In  1849  Peter  White  and  others  founded  Marquette,  on 
Lake  Superior,  as  a  shipping-point  for  their  ore-field.  They 
were  destined  to  make  more  money  out  of  iron  than  most  of 
the  prospectors  who  went  in  that  year  to  California  for  gold. 
At  least,  in  1891,  there  were  more  than  twice  as  many  millions 
paid  for  the  iron  ore  of  the  Lake  Superior  region  as  for  the 
gold  of  California.  Soon  two  other  ports,  Escanaba  and  Ash- 
land, began  to  ship  the  precious  brown  cargoes.  Three  vast 
ore-fields,  greater  in  extent  than  the  State  of  Massachusetts, 
were  opened  up  in  Michigan  and  Wisconsin — the  Marquette, 
Gogebic,  and  Menominee  ranges. 

From  these  three  ranges  alone,  since  Philo  Everett  trudged 
through  the  wilderness  with  his  Indian  guides,  there  have  been 
taken  seven  hundred  million  dollars'  worth  of  iron  ore.  And 
the  capital  that  began  to  build  up  this  stupendous  business 
was  enough  to  stock  a  fishing-boat  for  a  three  months'  cruise 
—nothing  more.  As  for  Everett  himself,  he  had  the  usual  fate 
of  the  pioneer.  His  discovery  made  him  at  once  a  wealthy 
man,  but  the  Marquette  fire,  in  1868,  swept  away  all  his  prop- 
erty and  left  him  to  struggle  for  the  remainder  of  his  life 
with  the  rank  and  file,  as  before. 

THE    FINDING    OF   VERMILION    RANGE 

One  romantic  story  follows  close  upon  another  in  the  history 
of  the  Lake  Superior  ore  regions.  Next  comes  the  tale,  in- 


THE   ROMANCE   OF   STEEL 

credible  if  it  appeared  in  a  work  of  fiction,  of  Charlemagne 
Tower  and  his  extraordinary  financial  adventure  in  the  wilds 
of  Minnesota. 

There  is  a  certain  compound  of  iron  ore  and  sulphur  which 
is  known  among  mining  experts  by  the  name  of  "  fool's  gold." 
It  has  deceived  hundreds  of  prospectors.  Even  Philo  M. 
Everett  imagined  for  a  while  that  part  of  his  iron  mountain 
was  gold,  and  had  a  breast-pin  made  of  a  little  yellow  nugget. 
Until  the  close  of  the  Civil  War,  a  number  of  "  cruisers " — 
woodsmen  who  located  timber  limits — had  been  arriving  in 
Duluth  with  stories  of  gold  mines  in  the  north  country.  An 
enterprising  surveyor,  George  R.  Stuntz,  determined  to  inves- 
tigate. When  he  returned  to  Duluth,  he  said : 

"  There  is  no  gold,  but  there  is  iron,  and  plenty  of  it,  on  the 
Vermilion  Range." 

This  was  the  first  announcement  of  the  existence  of  iron 
on  the  northern  side  of  Lake  Superior. 

The  ore  which  Stuntz  had  found  was  tested  and  found  to  be 
of  high  grade.  A  large  body  of  woodsmen  at  once  scattered 
through  the  Vermilion  Range,  and  spent,  so  it  is  commonly 
stated  in  Duluth,  about  a  hundred  thousand  dollars  in  the 
pursuit  of  claims.  They  found  provisions  so  dear  and  roads 
so  hard  to  cut  that  they  met  one  Sunday,  held  a  conference,  and 
decided  to  abandon  the  search.  For  ten  years  afterward  the 
great  Vermilion  Range  was  an  unpeopled  solitude,  with  no 
sound  to  jar  its  silence  except  the  drumming  of  the  partridge 
and  the  howl  of  the  timber  wolf. 

The  story  told  by  Stuntz  had  made  a  deep  impression  upon 
a  Duluth  banker  named  George  C.  Stone.  Stone  was  a  man 
of  wealth  and  influence  until  the  panic  of  1873,  when  nearly 
every  financier  in  the  city  was  bowled  over.  Duluth  had  a 
"  fish  and  potato  "  year,  and  lay  for  months  scarcely  beyond 
the  reach  of  famine.  Finding  himself  suddenly  idle  and 
moneyless^  Mr.  Stone  became,  in  the  most  creditable  sense,  a 

52 


DISCOVERY  OF  GREAT  ORE   RANGES 

company  promoter,  and  endeavoured  to  interest  capitalists  in 
the  mineral  wealth  of  the  Vermilion. 

He  went  first  to  Captain  Ward,  of  Detroit;  then  to  Orrin 
W.  Potter,  of  Chicago;  then  to  Amasa  Stone,  of  Cleveland. 
All  refused  to  undertake  the  work,  on  the  ground  that  docks 
and  railroads  would  cost  too  much.  In  1875,  accidentally, 
Stone  met  an  elderly  millionaire  from  Pottsville,  Pennsylva- 
nia, named  Charlemagne  Tower.  It  was  not  probable  that 
Tower,  who  had  gained  his  wealth  in  coal  lands  and  railroads, 
and  who  knew  nothing  whatever  of  iron,  would  be  easier  to 
convert  than  Captain  Ward.  But  at  this  point  a  love  story 
helps  out  the  plot.  The  world  of  romance  is  everywhere  very 
close  to  the  world  of  business.  Miss  Tower  had  given  her 
heart  and  hand  to  a  mining  engineer  named  R.  H.  Lee. 

"Why  not  build  this  sixty-six  mile  railroad  from  the  lake 
to  the  rich  ore-fields  and  put  your  son-in-law,  Lee,  in  charge 
of  the  whole  undertaking?  "  asked  Stone. 

Charlemagne  Tower  consented,  and  twenty-two  men  were 
sent  to  the  range  to  locate  claims.  After  six  weeks  in  the 
dreary  waste  the  men  became  discouraged  and  returned.  The 
general  opinion  in  Duluth  and  among  iron  men  was  that  the 
^Vermilion  Range  was  an  "  exploded  bubble."  "  All  the  iron 
ore  is  on  the  south  side  of  the  lake,"  they  said.  No  one  dared 
to  defy  the  popular  clamour  except  Stuntz  and  Stone,  whose 
persistence  finally  persuaded  Tower  to  make  a  second  attempt, 
and  he  began  to  build  a  railroad  from  Two  Harbors  back  to 
the  iron  lands. 

CHARLEMAGNE   TOWER'S    RAILROAD 

The  work  was  more  expensive  than  Tower  had  expected. 
Every  mile  cost  a  small  fortune.  By  the  time  it  was  half 
finished  he  had  signed  checks  for  a  million  dollars.  The  sec- 
ond half  of  the  line  cost  a  second  million,  and  the  task  was 
only  half  done.  Before  ore  could  be  shipped  the  mines  had 

53 


THE   ROMANCE   OF   STEEL 


to  be  opened  up  and  machinery  and  rolling  stock  purchased. 
Neither  Stone  nor  Lee  had  any  property.  Every  bill  had  to 
be  paid  by  Tower. 

For  four  years  he  sank  his  millions  in  a  northern  wilderness 
which  he  had  never  seen  to  find  iron  which  was  generally 
believed  to  exist  only  in  the  brain  of  "  that  rainbow-chaser, 
Stone."  Then  came  the  stringency  of  1884,  when  more  than  a 
hundred  banks  collapsed  and  alarmed  all  investors.  Tower 
had  spent  three  and  a  half  millions,  and  had  little  more  than  a 
million  left;  yet  Stone  said,  "  We  must  have  half  a  million 


more." 


Tower  reproached  Stone  bitterly.  "  You  have  ruined  me," 
he  said. 

Stone  had  only  one  more  card  to  play.  If  it  failed,  their 
railroad  would  become  a  streak  of  rust  and  their  mines  wolf- 
dens.  He  appealed  to  the  Minnesota  Legislature  for  help. 

"  Give  us  the  Duluth  and  Winnipeg  land  grant,  which  has 
been  forfeited,"  he  said,  "  and  we  can  finish  our  undertaking." 

The  lawmakers  received  his  request  with  indifference  or 
hostility,  but  Stone  persevered  until  a  few  were  persuaded  to 
assist  him.  When  the  proposition  came  fairly  before  the 
House,  there  was  a  long  and  strongly  contested  debate.  One 
opponent  spoke  for  five  hours  without  intermission.  On  both 
sides  there  were  tricks  of  the  lobby.  At  three  o'clock  in  the 
morning  a  vote  was  taken,  and  the  bill  was  passed. 

This  success  persuaded  Tower  to  play  out  the  desperate 
game.  He  sacrificed  his  gilt-edged  securities  and  threw  half 
a  million  more  into  the  Minnesota  sink-hole.  In  a  few  months 
the  first  ore-train  wriggled  down  the  crooked  track  to  the  dock 
at  Two  Harbors.  The  ore  was  high-grade,  and  easily  mined. 
Stone's  golden  dream  was  coming  true.  For  two  years  the 
mines  were  operated  with  great  profit,  attracting  the  attention 
of  John  D.  Rockefeller,  H.  H.  Porter,  of  Chicago,  and  others. 
An  offer  was  made  to  Mr.  Tower  of  eight  million  dollars, 

54 


DISCOVERY   OF  GREAT  ORE   RANGES 

exactly  twice  what  he  had  invested.  He  accepted  the  offer, 
giving  Mr.  Stone  four  hundred  thousand  as  his  share  in  the 
profits. 

Thus  was  laid  the  foundation  of  the  Tower  fortune,  now 
controlled  by  Charlemagne  Tower's  son  and  namesake,  for- 
merly American  ambassador  at  St.  Petersburg,  and  at  present 
holding  the  same  post  at  Berlin.  Thus,  too,  the  vast  wealth 
of  the  Vermilion  Range  was  given  to  the  nation,  the  total  out- 
put up  to  the  present  year  having  amounted  to  over  eighty- 
five  million  dollars'  worth  of  ore.  Two  busy  little  towns, 
Tower  and  Ely,  make  the  wilderness  cheerful;  while  at  Two 
Harbors  are  the  best  equipped  ore-docks  in  the  world.  The 
property  has  been  twice  sold  since  1886 — to  the  Federal  Steel 
Company,  and  by  it  to  the  United  States  Steel  Corporation, 
both  times  at  an  advance  in  price. 

THE    MOST    WONDERFUL    RANGE    OF    ALE 

And  now  comes  the  story  of  Mesaba — there  are  at  least  five 
ways  of  spelling  the  name — the  last  and  greatest  of  the  world's 
iron  ranges.  This  range  lies  mainly  in  St.  Louis  County,  Min- 
nesota, north  of  Duluth,  and  farther  west  than  the  others.  It 
extends  over  a  huge  tract  at  least  twice  as  large  as  the  State  of 
Rhode  Island. 

A  few  years  before  the  Civil  War  a  hardy  woodsman  named 
Lewis  H.  Merritt  emigrated  from  Chautauqua  County,  New 
York,  to  Duluth,  with  his  wife  and  family  of  four  small  boys. 
When  the  "  fool's  gold "  excitement  began,  he  was  one  of 
those  who  followed  the  yellow  will-'o-the-wisp  through  the 
northern  wilderness.  He  found  no  gold;  but  he  brought  home 
a  small  paper  parcel  of  red  iron  ore,  and  showed  it  to  his  sons, 
now  in  their  teens.  He  taught  them  its  value,  and  told  them 
of  a  new  unexplored  range  which  in  his  opinion  was  a  store- 
house of  mineral  wealth. 

55 


THE   ROMANCE  OF  STEEL 


Soon  afterward,  the  four  brothers,  Leonidas,  Alfred,  An- 
drus,  and  Cassius,  plunged  into  the  forest  and  became  expert 
and  daring  woodsmen.  To  and  fro  in  the  whole  north  region 
they  ventured,  until  they  became  the  Leatherstockings  of  Min- 
nesota. Although  their  abilities  fitted  them  for  woodcraft  and 
not  for  business,  within  twenty  years  their  knowledge  of  tim- 
ber lands  made  them  fairly  wealthy  men.  As  soon  as  they 
had  accumulated  sufficient  capital  they  withdrew  from  the 
timber  business,  and  in  1885  located  their  first  iron  mine. 

Three  other  Merritts,  tKeir  nephews,  joined  them,  and  for 
several  years  the  Merritt  brothers,  as  the  seven  were  usually 
called,  travelled  up  and  down  the  entire  length  of  the  Mesaba 
range,  until  it  was  thoroughly  surveyed,  cross-sectioned,  and 
mapped.  All  supplies  had  to  be  carried  from  eighty  to  a 
hundred  and  fifty  miles  upon  their  backs.  In  so  dense  a  wil- 
derness horses  would  have  been  useless.  If  hardships  be  the 
price  of  success,  the  Merritts  paid  it  in  full.  Many  a  time 
their  hunger-belts  were  pulled  to  the  last  hole. 

But  more  obstructive  than  the  opposition  of  trees,  swamps, 
and  rivers,  was  the  influence  of  conservatives  at  Duluth  who 
cried:  ""Absurd!  Impossible!  What  do  these  Merritt  farmers 
know  about  mineral  deposits?  One  lesson  in  geology  would 
teach  them  that  there  can  be  no  iron  on  the  Mesaba.  Beware 
of  the  Merritts!  They  are  trying  to  dupe  the  public  into  buy- 
ing worthless  stock." 

Duluth  listened  to  the  "  knockers,"  and  when  the  Merritts 
began  to  build  a  railroad  they  could  not  obtain  permission  to 
make  Duluth  their  lake  terminus.  The  nearest  existing  line 
ran  between  Duluth  and  Winnipeg,  fifty  miles  distant  from 
the  Mesaba.  Lon  Merritt  succeeded  in  making  a  traffic  con- 
tract with  this  railroad,  and  in  two  years  the  Merritt  line  was 
built  to  connect  with  it. 

How  the  Merritts  managed  to  build  that  fifty-mile  ore  rail- 
road is  still  a  Minnesota  mystery.  But  by  sacrificing  every 

56 


ALFRED    MERRITT 


DISCOVERY  OF  GREAT  ORE  RANGES 

dollar's  worth  of  property  in  their  possession,  by  selling  shares 
in  the  enterprise  to  a  few  friends,  and  by  the  most  heroic 
persistence,  they  succeeded.  Ore  docks  were  built  on  the  lake 
front  at  Allouez,  mines  were  opened,  rolling-stock  was  pur- 
chased, and  in  1892  their  first  trainload  was  hauled  out  and 
sold.  The  Merritts  were  at  this  time  out  of  debt,  and  the  ma- 
jority owners  of  a  property  worth  many  millions. 

Then  came  the  financial  smash  of  1893.  The  Merritts  had 
launched  out  too  freely,  and  went  down  with  the  wreckage  of 
that  disastrous  year.  John  D.  Rockefeller  acquired  the  prop- 
erty, and  he,  together  with  James  J.  Hill,  who  soon  afterward 
built  a  competing  line,  developed  the  Mesaba  Range  by  a 
large  investment  of  capital.  It  is  generally  believed  in  Duluth 
that  Rockefeller  paid  too  much  for  his  ore  holdings,  with  the 
exception  of  what  he  took  from  the  Merritts.  One  speculator 
bought  a  tract  of  land  for  fifty  thousand  dollars,  and  in  a  few 
days  turned  it  over  to  a  Rockefeller  agent  for  eight  hundred 
thousand. 

THE  TREASURE  PITS  OF  THE  MESABA 

A  Mesaba  iron  mine  is  one  of  the  world's  wonders.  The 
ore  is  not  buried  deep  in  the  earth,  but  lies  just  underneath 
the  surface  in  heaps  and  hills,  as  though  a  tribe  of  friendly 
gnomes  had  mined  it.  There  are  no  sunken  shafts,  no  sun- 
less caverns  and  subways,  no  burrowing  miners  turning  their 
tireless  drills  by  the  light  of  a  flaring  torch.  A  Mesaba  mine 
is  as  open  to  the  daylight  as  a  brickyard.  Some,  with  terraced 
sides,  resemble  vast  amphitheatres;  others,  wide  and  shallow, 
are  not  unlike  the  switching-yard  of  a  railroad;  and  a  few 
suggest  extinct  volcanoes,  which  in  their  last  gasp  had  ex- 
ploded and  torn  open  their  red  sides. 

In  some  places  the  ore  is  barely  hidden  by  a  foot  of  loose 
soil,  but  usually  about  fifty  feet  of  earth  covers  the  food  for 
which  four  hundred  furnaces  are  always  hungry.  One  body  of 

57 


THE   ROMANCE   OF   STEEL 

ore  is  two  and  a  half  miles  long,  half  a  mile  wide,  and  from  one 
hundred  to  four  hundred  feet  thick.  The  thickest  mass  is 
four  hundred  and  forty  feet  through,  dwarfing  the  tallest  of 
our  skyscrapers.  There  are  five  of  these  immense  treasure- 
pits  whose  total  product  is  eighteen  million  dollars'  worth  of 
ore  each  year. 

The  Mesaba  ore  is  not  hard  and  rocklike.  Instead  of  blast- 
ing it  loose,  as  is  done  in  other  iron  .ranges,  the  Mesaba 
"  miner  "  is  merely  a  man  who  operates  a  steam-shovel.  Eight 
workmen  can  handle  one  shovel,  and  under  favourable  condi- 
tions they  can  load  more  ore  in  one  hour  than  five  hundred 
delving  miners  can  bring  up  in  a  day  from  the  average  rock 
mine.  At  every  swing  of  the  steam-shovel's  powerful  arm, 
five  tons  of  ore  drop  into  a  big  steel  car.  The  arm  swings  twice 
a  minute.  In  five  minutes  the  car  is  heaped  and  another 
is  pushed  into  its  place.  When  twenty  cars  are  full,  the  pon- 
derous hundred-and-thirty-ton  engine  pulls  them  out  of  the 
mine,  and  eighty  miles  through  the  dense  forest  to  Lake  Su- 
perior. From  the  high  trestle-work  of  an  ore-dock  the  ore 
is  dropped  quickly  into  large  bins,  and  the  empty  train  returns 
to  the  mine  for  another  thousand-ton  load.  Such  is  "  mining" 
on  the  Mesaba. 

Until  eleven  years  ago  there  was  not  an  iron  mine  in  the 
world  that  had  produced  half  a  million  tons  in  a  single  year. 
To-day  there  are  fifteen  mines  on  Lake  Superior  that  produce 
from  one  to  three  times  as  much.  The  Oriskany  Mine,  in 
Virginia,  was  thought  to  be  a  record-breaker  when  its  output 
was  a  thousand  tons  a  day;  but  a  Mesaba  mine  will  turn  out 
fifteen  thousand  tons  a  day  for  weeks  together.  Seventy  steam- 
shovels  are  now  tearing  at  the  earth  and  ore  of  the  Mesaba, 
and  new  records  will  probably  be  made  before  these  words 
are  printed. 

The  cost  of  mining  has  been  beaten  down  to  as  little  as 
twelve  cents  a  ton — a  minimum  unimaginable  even  among 
the  underpaid  miners  of  Greece  or  Spain. 

58 


DISCOVERY   OF  GREAT  ORE   RANGES 

ONE-SIXTH    OF   THE   WORLD'S   ORE   SUPPLY 

At  first  the  Mesaba  ore  made  trouble  in  the  furnaces.  Being 
so  fine,  it  caked  and  exploded,  or  went  up  like  smoke.  But 
furnaces  were  soon  built  in  a  way  to  prevent  these  mishaps, 
and  to-day  more  than  half  of  the  steel  made  in  Pittsburgh, 
Youngstown,  Wheeling,  and  Joliet,  is  made  from  Mesaba  ore. 
Thirteen  million  tons  come  down  the  Great  Lakes  every  year 
from  the  deposits  that  the  Merritt  boys  discovered — one-third 
of  all  the  iron  ore  mined  in  the  United  States,  and  one-sixth 
of  all  mined  in  the  world.  Young  as  the  range  is,  it  has  already 
added  more  than  a  quarter  of  a  billion  dollars  to  the  wealth 
of  the  nation. 

In  the  busy  summer  season  more  than  seven  thousand  men, 
principally  Finns  and  Italians,  are  employed  in  the  mines  of 
the  Mesaba  alone.  Three  little  towns — Ribbing,  Virginia, 
and  Evelyth — have  sprung  up  in  hothouse  haste.  Hibbing, 
the  largest,  has  a  population  of  six  thousand,  and  boasts  a  de- 
partment store,  three  banks,  two  newspapers,  electric  lights, 
and  a  hotel  with  six-course  dinners  and  menus  printed  daily. 
More  wonderful  still,  it  has  a  theatre  which  can  seat  twelve 
hundred — a  palace  of  pleasure  which  is  "  a  dream  of  sparkling 
lights  and  mellow  tints  charmingly  blended,"  to  quote  a  proud 
editorial  from  the  Mesaba  Ore.  A  dozen  mines,  including  the 
Burt  and  the  Mahoning,  are  within  walking  distance  of  the 
depot,  and  the  Stevenson  is  seven  miles  distant. 

There  is  no  industry  on  the  Mesaba  except  mining.  The 
wooded  wilderness  encircles  every  town  and  mining  village, 
and  at  night  the  howl  of  the  wolf  is  heard  as  he  slinks  across 
the  railroad  track  or  starts  at  the  light  in  a  log-cabin  window. 

"  I  shot  a  bear  here  last  January,"  says  my  driver,  as  we  ap- 
proach the  Stevenson  Mine. 

Here  and  there,  among  the  mines,  are  drilling  parties,  hunt- 
ing for  new  locations  or  measuring  ore-bodies  that  are  about 
to  be  sold.  About  two  hundred  and  fifty  drills  are  now  in 

59 


THE   ROMANCE  OF   STEEL 

operation  on  the  Mesaba.  This  one  item  of  drilling  illustrates 
how  elaborate  and  costly  the  mechanism  of  the  iron  and  steel 
business  has  become — how  far  removed  from  the  cheap  and 
simple  days  of  Ethan  Allen.  A  common  "  churn  "  drill  costs 
usually  about  fifteen  hundred  dollars,  and  a  diamond  drill  is 
worth  twenty-five  hundred  to  four  thousand.  Three  men  are 
required  to  a  drill,  wages  ranging  from  two  to  four  dollars 
a  day.  Thus  the  cost  of  one  first-class  drill  is  almost  equal 
to  the  total  capital  of  the  Lynn  iron-works  in  1645,  and  eighty 
times  greater  than  the  price  paid  by  Richard  Leader,  its  mana- 
ger, for  a  slitting-mill. 

The  discovery  of  Lake  Superior  ore  has  changed  the  indus- 
trial map  of  the  United  States.  It  has  opened  up  a  new  ter- 
ritory as  large  as  France.  It  has  shifted  the  centre  of  the  iron 
and  steel  trade  from  the  Ohio  River  to  the  Great  Lakes.  It 
has  built  up  eight  railroads,  more  than  a  dozen  busy  towns, 
and  the  largest  commercial  fleet  in  the  world.  It  feeds  our 
furnaces  with  the  best  and  the  cheapest  ore,  and  does  more 
than  any  other  one  factor  to  give  America  the  supremacy  in 
iron  and  steel.  All  this  in  less  than  fifty  years! 

CARRYING   ORE  DOWN   THE   LAKES 

The  old  captain  who  brought  down  the  first  cargo  of  ore 
from  Marquette  to  Lake  Erie  in  1853  is  still  hale  and  hearty, 
and  may  be  seen  any  fine  afternoon  on  the  streets  of  Ashtabula. 
Until  1 86 1  very  little  ore  was  carried  down  the  lakes.  The 
largest  vessels  in  the  trade  were  four-hundred-ton  schooners, 
and  the  freight  charge  was  three  dollars  a  ton,  nearly  four  times 
more  than  the  present  rate.  About  that  time  a  captain  named 
Winslow  made  himself  ridiculous  among  his  mates  by  saying: 

"  There  are  men  now  alive  who  will  live  to  see  the  day 
when  these  wooden  sailing  vessels  will  be  replaced  by  steam- 
boats made  of  iron  and  steel." 

Twenty-five  years  ago  steamers  began  to  replace  sailing  ves-, 

60 


DISCOVERY   OF   GREAT  ORE   RANGES 

sels  and  ten  years  afterward  came  the  first  steel  ore-ships.  At 
first  the  latter  were  disastrous  failures.  Two  of  them  came 
apart  in  a  storm,  just  as  the  builders  of  wooden  ships  had 
prophesied.  But  the  steel-men  persevered,  found  out  how  to 
strengthen  them,  and  gradually  droye  the  wooden  ships  off  the 
water.  The  cigar-shaped  "  whaleback  "  was  introduced  into 
the  ore-carrying  trade  by  John  D.  Rockefeller,  who  owned 
a  fleet  of  seventy  ore-ships  in  1890.  To-day  the  "  whaleback  " 
is  out  of  date,  as  its  hatches  are  too  narrow  for  the  unloading 
machinery. 

At  present  the  average  large  steel  ore-boat  carries  seven 
thousand  tons  or  more,  at  a  speed  of  twelve  miles  an  hour.  She 
is  manned  by  a  crew  of  twenty-four,  most  of  whom  receive 
more  than  was  paid  to  a  captain  fifty  years  ago.  The  captain's 
salary  is  nineteen  hundred  and  eighty  dollars.  Three  years 
ago  a  Duluth  company  built  the  immense  ore-steamer  Augus- 
tus B.  Wolvin,  carrying  twelve  thousand  five  hundred  tons  and 
having  thirty-two  hatches.  For  swift  loading  and  unloading, 
this  remarkable  vessel  has  never  been  equalled.  Its  records 
are  incredible  in  Europe  and  startling  to  the  steamship  men 
of  the  United  States.  For  instance,  a  load  of  ten  thousand 
two  hundred  and  forty-five  tons  of  ore  was  placed  on  board 
her  in  ninety  minutes,  and  unloaded  to  the  last  pound  in  four 
and  a  half  hours.  Forty  years  ago  a  load  of  five  hundred  tons 
was  put  aboard,  by  a  crowd  of  men  with  shovels  and  wheel- 
barrows, in  not  less  than  three  days.  To-day  the  Wolvin  takes 
on  five  hundred  tons  in  five  minutes,  and  unloads  it  in  fifteen. 

The  Wolvin  has  set  a  new  standard  for  ore-ships,  to  which 
the  United  States  Steel  Corporation  has  been  obliged  to  con- 
form. Last  year,  feeling  that  its  ore-fleet  was  dwarfed  by  this 
great  independent  vessel,  the  Steel  Trust  launched  four  new 
boats,  each  nine  feet  longer  than  the  Wolvin,  and  built  on  sim- 
ilar lines.  These  gigantic  boats  represent  an  outlay  of  seventeen 
hundred  thousand  dollars  apiece,  and  will  carry  eight  hundred 

61 


THE    ROMANCE    OF    STEEL 

thousand  tons  of  ore  down  the  lakes  in  a  single  season — enough 
to  keep  an  old-time  furnace  busy  for  four  hundred  years. 

The  famous  Suez  Canal,  the  highway  between  Europe  and 
the  East,  has  only  one-third  the  freight  tonnage  of  our  young 
"  Soo  "  canal,  which  connects  Minnesota  with  Pennsylvania 
and  New  York;  and  two-thirds  of  the  traffic  through  the 
"  Soo  "  is  the  carrying  of  iron  ore.  To  put  the  total  tonnage 
into  figures  is  to  be  unintelligible.  Who  can  realise  the  magni- 
tude of  three  hundred  million  tons — the  output  of  the  Lake 
Superior  mines  in  less  than  fifty  years?  Could  even  the  "  rain- 
bow-chasers "  — Philo  M.  Everett,  George  C.  Stone,  and  Lon 
Merritt — have  foreseen  that  their  pioneering  would  lead  the 
way  literally  to  a  billion-dollar  wilderness? 

THE  BUILDING  OF  A  GREAT  ORE-PORT 

This  imposing  ore-fleet  of  four  hundred  vessels  also  calls 
for  new  harbours,  new  docks,  new  railroads.  At  the  loading 
end  there  are  now  seven  excellent  harbours,  with  more  than 
six  miles  of  docks.  At  the  unloading  end,  there  are  three  ore- 
harbours  on  Lake  Michigan  and  nine  on  Lake  Erie.  Con- 
neaut,  the  port  built  by  Mr.  Carnegie,  and  now  belonging 
entirely  to  the  Steel  Trust,  won  the  leadership  in  1904  for  the 
first  time  from  Cleveland  and  Ashtabula. 

Less  than  six  years  ago  Mr.  Carnegie  stuck  a  pin  in  the 
map  of  Ohio,  and  said: 

"  We  will  build  a  harbour  of  our  own  here,  as  the  point 
where  our  ore-ships  and  our  ore-railroad  meet."  The  spot  indi- 
cated by  the  pin  was  no  more  than  a  swampy  village.  To-day 
it  is  the  foremost  harbour  on  the  Great  Lakes  in  point  of  ton- 
nage, and  in  dock  equipment  it  has  no  equal  in  any  country. 
Half  a  day  after  an  ore-steamer  arrives,  its  cargo  has  been 
transferred  into  freight-cars  and  is  trundling  southward  on  its 
journey  to  Pittsburgh.  Four  miles  of  cars  can  be  loaded  and 
hauled  out  in  one  day. 

62 


DISCOVERY   OF   GREAT   ORE    RANGES 


The  unloading  machines  are  the  wonder  of  all  visiting  Eu- 
ropean engineers.  Here  you  can  see  a  fifty-ton  car  of  coal 
picked  up  as  if  it  were  a  box  of  candy  and  tipped  sideways 
into  a  wide  hopper,  which  conveys  the  coal  to  a  vessel's  hold. 
With  the  guidance  of  four  men,  two  hundred  cars  are  emptied 
between  sunup  and  sundown.  Here  you  have  the  largest 
bridge-crane  ever  erected,  which  can  pick  up  or  put  down  any- 
thing from  a  coal  scuttle  to  a  locomotive,  at  any  spot  within 
an  area  of  seven  and  a  half  acres.  To  use  a  New  York  illus- 
tration, it  could  pick  up  an  electric  car  at  Twenty-Eighth 
Street  and  Sixth  Avenue,  and  swing  it  to  Thirtieth  Street  and 
Seventh  Avenue  in  a  few  seconds. 

Here  you  may  see  the  marvellous  Hulett  automatic  unload- 
ers,  which  are  nothing  less  than  gigantic  steel  arms  that  thrust 
themselves  into  a  vessel's  depth  and  grasp  a  ten-ton  handful 
of  ore  apiece.  Each  arm  has  not  only  a  hand,  but  a  wrist  as 
well.  The  operator,  standing  on  the  wrist  like  an  obstinate 
insect,  goes  up  and  down  with  the  powerful  arm,  which  he  can 
guide  in  any  necessary  direction.  The  towering  machine 
weighs  more  than  an  army  of  five  thousand  men,  yet  it  obeys 
the  slightest  touch  of  its  human  master's  hand  as  readily  as 
if  it  were  a  bicycle.  Six  workmen  and  one  machine  can  do 
the  work  that  formerly  required  ninety  shovellers.  When  the 
great  hand  of  the  machine  is  open,  it  covers  eighteen  feet  of 
ore,  and  closes  with  a  grip  that  is  irresistible.  Several  times, 
in  the  holds  of  ore-vessels,  the  writer  has  seen  steel  girders 
that  were  bent  and  wrenched  away  by  the  grip  of  this  mighty 
giant. 

THE  RAILROADS   OF  THE    ORE  RANGES 

Of  the  eight  railroads  that  earn  their  dividends  by  carrying 
Lake  Superior  ore,  four  are  the  property  of  the  United  States 
Steel  Corporation.  To  haul  the  ore  to  the  lake  requires  the 
use  of  about  two  hundred  and  fifty  locomotives  and  eighteen 

63 


THE   ROMANCE   OF  STEEL 

thousand  cars.  Those  who  hope  to  visit  the  great  treasure- 
land  of  Minnesota  need  have  no  fear  that  they  will  be  obliged 
to  make  the  journey  sitting  on  top  of  a  loaded  coal-car  or 
lumber-truck.  The  ore-railroads  are  first  class  in  almost  every 
respect.  The  tracks  are  straight  and  smooth,  laid  with  ninety- 
pound  rails.  If  it  were  not  for  the  groups  of  miners  and 
lumbermen,  dressed  picturesquely  in  gay  blanket  coats,  fur 
caps,  leggings,  and  shoepacks,  and  for  a  general  spirit  of 
unconventionality  and  good-fellowship,  it  would  be  easy  to 
imagine  oneself  on  the  way  from  Boston  to  New  York. 

One  conductor  of  a  Duluth  and  Ribbing  train,  dissatisfied 
with  his  salary  in  this  region  of  millions,  spends  his  time 
between  stations  selling  sixty-cent  suspenders  to  the  passengers. 
He  has  sold  seven  hundred  pairs,  he  says,  as  they  are  the  most 
wonderful,  non-button  suspenders  the  world  has  ever  seen. 
Another  conductor  lends  fifteen  dollars  to  a  passenger  who  has 
forgotten  to  call  for  his  pay-envelope.  At  one  station  a  drunken 
recruiting  sergeant,  with  a  "  kick  me  "  sign  on  his  back,  is 
being  ping-ponged  from  one  group  of  hilarious  miners  to 
another.  Such  little  events  serve  to  remind  the  traveller  that 
he  is  far  from  Massachusetts;  but  so  far  as  the  luxurious  chair- 
car  and  the  smooth  road-bed  are  concerned,  there  is  no  dif- 
ference between  the  train  that  runs  up  to  the  Mesaba  and  the 
one  that  winds  along  the  Hudson. 

Ore-railroads  are  found  to  be  highly  profitable.  They  carry 
no  perishable  freight,  need  no  expensive  depots  or  terminals, 
carry  a  slight  burden  of  taxation,  and  cost  comparatively  little 
to  build.  The  main  drawback  is  in  having  a  busy  season  of 
only  seven  months.  The  first  ore-line — between  Catasauqua 
and  Fogelsville,  in  Pennsylvania — built  by  David  Thomas  fifty 
years  ago,  has  paid  dividends  without  missing  a  year  since  its 
first  train  was  run.  Since  the  discovery  of  the  surface  mines 
of  the  Mesaba,  the  problem  of  rapid  mining  has  become 
largely  a  matter  of  railroading.  As  James  J.  Hill  said, 

64 


LEONIDAS    MERRITT 


OFTHE 

UNIVERSITY 

OF 


DISCOVERY   OF   GREAT   ORE   RANGES 

"  the  question  of  ore  production  has  now  become  a  ques- 
tion of  the  proper  switching  of  trains."  This  remarkable 
statement  is  true  of  American  iron  mines  only,  and  would  be 
entirely  incomprehensible  to  an  untravelled  mine-owner  in 
Sweden  or  Spain. 

MILLIONS    MADE    FROM    IRON    ORE 

For  ten  years  the  "ore  pool"  has  averted  the  evils  of  com- 
petition and  fixed  prices  to  its  own  satisfaction.  Two  years 
ago  Alabama  lowered  prices  and  demoralised  the  trust;  but 
last  year,  by  means  of  "  informal  conferences,"  the  ore  men 
came  to  a  fairly  general  agreement  as  to  prices  and  amount 
of  output.  The  grading  of  ore  has  been  done  for  the  last  two 
years  by  chemical  experts,  who  analyse  the  samples  and  fix 
values  to  the  one-hundredth  part  of  a  cent.  Cleveland  is  the 
nerve-centre  from  which  the  independent  mines  and  ore- 
fleets  are  managed;  and  if  it  were  not  for  its  inconvenient 
harbour,  it  would  easily  be  the  first  of  the  ore-ports. 

Three  consecutive  groups  of  millionaires  have  been  created 
by  the  natural  wealth  of  the  Lake  Superior  wilderness.  First 
came  the  fur-traders,  who  scattered  their  trading-posts  along 
the  lake  shore  and  laid  the  foundation  of  great  fortunes  by 
trafficking  with  the  Indians.  It  is  an  interesting  fact  that 
John  Jacob  Astor  established  trading-posts  in  the  Lake  Su- 
perior ore  regions  as  long  ago  as  1816.  He  had  his  head- 
quarters at  La  Pointe,  and  was  protected  by  a  fort  at  Fond  du 
Lac.  Had  he  obtained  possession  of  the  region  through 
which  he  traded,  he  would  have  bequeathed  to  his  descendants 
a  far  more  valuable  property  than  that  which  they  possess 
to-day,  even  though  the  latter  may  be  the  most  coveted  and 
costly  real  estate  in  the  United  States. 

Next  came  the  lumbermen,  who  made  millions  out  of  the 
Lake  Superior  forests.  The  iron  ore,  in  fact,  may  be  called 
a  by-product  of  the  exhausted  timber  lands.  When  ore  was 

65 


THE   ROMANCE   OF   STEEL 

found,  part  of  the  land  belonged  to  the  State,  part  to  the 
public  school  fund,  and  part  to  the  lumbermen.  The  latter 
were  at  once  enriched,  making  more  from  the  royalties  on 
the  ore  than  they  had  obtained  from  the  sale  of  the  timber. 
The  average  royalty  is  twenty-five  cents  a  ton.  Many  lum- 
bermen who  had  lost  their  fortunes  suddenly  became  wealthy 
again. 

Tales  are  told  of  worthless  old  deeds  and  leases  which  were 
rummaged  out  of  desks  and  found  to  be  the  titles  to  fortune. 
One  woman,  the  penniless  widow  of  a  Duluth  lumberman, 
accidentally  found  an  old  lease  in  a  drawer  and  has  been 
receiving  forty  thousand  dollars  a  year  out  of  the  ore  business 
ever  since.  The  Yawkey,  Fowler,  Palms,  Flinn,  Murphy, 
and  Stephens  fortunes  in  Detroit  were  mainly  dug  out  of  the 
Lake  Superior  mines.  W.  R.  Burt,  C.  N.  Nelson,  and  many 
other  Michigan  multi-millionaires,  became  so  by  the  mere 
holding  of  acres  in  the  billion-dollar  wilderness. 

The  public  school  system  of  Minnesota  has  to-day  more 
than  sixteen  million  dollars  in  its  treasury,  accumulated  by 
the  leasing  of  its  ore  and  timber  lands.  Fifteen  mines  are 
now  paying  a  royalty  of  twenty-five  cents  a  ton  to  the  schools. 
Every  swing  of  the  steam-shovel's  five-ton  bucket  puts  a 
'dollar  and  a  quarter  into  the  service  of  education.  This 
arrangement  is  not  due  to  the  astute  statesmanship  of  the 
Minnesota  legislators.  Quite  the  reverse.  The  story  runs 
that  away  back  in  1857  the  school  authorities,  being  in  great 
need  of  money,  clamoured  for  a  share  of  the  public  lands. 

"Certainly,"  replied  the  Assemblymen.  "We'll  give  you 
ten  sections." 

When  the  school  authorities  received  the  official  paper, 
they  found  to  their  disgust  that  the  school  lands  were  located 
in  the  remote,  uninhabited  wilderness,  in  the  extreme  north- 
eastern part  of  the  State.  The  land  was  as  worthless,  they 
thought,  as  if  it  had  been  at  the  bottom  of  Lake  Superior. 

66 


DISCOVERY  OF  GREAT   ORE   RANGES 

For  more  than  twenty  years  this  fooling  of  the  school 
authorities  was  one  of  the  standing  jokes  of  the  Minnesota 
politicians.  Was  there  ever  before  a  practical  joke  which 
had  such  a  golden  ending  for  its  victims? 

Many  a  lawyer,  also,  laid  the  foundation  of  his  fortune 
when  the  ore  regions  were  discovered.  There  was  constant 
difficulty  in  securing  clear  titles  to  the  locations,  and  the 
Minnesota  courts  were  overworked  trying  to  cope  with  the 
problem.  One  lawsuit — the  famous  Section  Thirty  case — 
lasted  for  twenty  years,  and  was  finally  decided  by  the  Su- 
preme Court  of  the  United  States.  The  contest  raged  over 
a  small  tract  of  ore  land,  three  hundred  and  twenty  acres, 
claimed  both  by  Lon  Merritt  and  by  the  Minnesota  Iron 
Company.  A  million  dollars  was  spent  in  litigation  before 
the  suit  was  finally  won  by  Merritt. 

The  Lake  Superior  ore  mines  are  the  last  and  most  won- 
derful of  the  world's  mineral  discoveries.  The  experts  say 
that  they  are  practically  all  taken  up,  and  that  at  the  present 
rate  of  consumption  their  best  deposits  will  be  exhausted  in 
fifty  years — the  Mesaba,  the  richest  of  them  all,  in  less  than 
twenty-five.  But  who  can  tell?  The  same  was  said  in  1845, 
until  Philo  M.  Everett  succeeded.  It  was  said  in  1882,  until 
Stone  and  Tower  opened  the  way  to  new  deposits.  It  was 
said  in  1892,  until  Lon  Merritt  uncovered  the  richest  range 
of  them  all. 

The  immense  recent  finds  in  Alabama  and  British  Colum- 
bia show  that  there  may  yet  be  many  new  ore  worlds  to 
conquer.  The  "  ore  famine,"  so  freely  predicted,  is  not  likely 
to  trouble  us  or  our  children.  On  the  contrary,  every  sign 
indicates  that  our  iron  and  steel  business  is  about  to  enter 
a  period  of  world-wide  activity  which  will  make  the  golden 
age  of  Carnegie  seem  no  more  than  the  rosy  flush  of  the  dawn. 


67 


CHAPTER   III 
THE  RISE  OF  ANDREW  CARNEGIE 

The  Most  Remarkable  Career  and  the  Most  Striking  Personality  in  the  His- 
tory of  Iron  and  Steel — How  Andrew  Carnegie,  Beginning  as  a  Bobbin- 
Boy,  Became  a  Stoker,  a  Telegrapher,  and  a  Railroad  Superintendent; 
How  He  Entered  the  Iron  Business,  Began  to  Make  Steel,  and  Fought 
His  Way  through  Many  Difficulties  to  Colossal  Wealth  and  the  Mas- 
tery of  a  Great  Industry. 

IF  Andrew  Carnegie  could  have  chosen  the  date  of  his 
own  birth,  he  could  not  have  improved  upon  the  year 
1835.  The  raw  materials  out  of  which  his  steel  empire 
was  built — the  Connellsville  coke,  the  so-called  Bessemer  steel 
process,  the  Lake  Superior  ore,  and  the  era  of  railroad- 
building — were  not  assembled  until  Mr.  Carnegie  was  thirty- 
five  years  of  age.  Not  until  1861  was  the  first  solid  tariff 
wall  erected;  and  not  until  three  years  later  came  the  first 
boom  in  the  iron  and  steel  trade.  If  his  life  had  begun 
twenty  years  earlier  or  later,  he  would  undoubtedly  have 
missed  the  great  opportunity  which  came  to  those  born  under 
his  star. 

Had  he  been  born  before  the  discovery  of  America,  he 
would  have  been  shut  out  of  the  iron  and  steel  trade  com- 
pletely. He  would  not  have  been  allowed  to  make  so  much 
as  a  horseshoe.  During  the  Middle  Ages  no  son  of  a  weaver, 
musician,  barber,  watchman,  miller,  tanner,  shepherd,  or  tax- 
collector  was  permitted  to  enter  the  iron  and  steel  guilds, 
which  were  for  centuries  very  exclusive  and  aristocratic.  The 
men  who  hammered  steel  and  gold  were  the  members  of 
an  industrial  nobility,  as  distinctly  separated  from  the  other 

68 


THE   RISE   OF   ANDREW   CARNEGIE 

artisans  below  as  they  were  from  the  nobles  and  courtiers 
above. 

Andrew  Carnegie  was  a  child  of  poverty  and  discon- 
tent. His  father,  a  weaver  by  trade,  a  labour  agitator  by 
reputation,  was  described  as  one  of  the  most  "  troublesome  " 
street  orators  in  the  Scottish  town  of  Dunfermline.  His 
uncle,  also,  was  a  mob  leader,  who  was  on  one  occasion 
arrested  and  jailed  for  inflammatory  talk.  Young  Andrew 
got  no  schooling  after  he  was  twelve,  and  very  little  before. 
In  fact,  he  was  doing  his  boyish  best  to  gather  "siller"  years 
before  he  became  a  bobbin-boy  in  Allegheny  City.  When 
he  was  a  youngster  of  ten,  he  and  his  cousin  managed  by 
doing  odd  jobs  to  save  up  four  shillings  and  sixpence — a  few 
cents  more  than  a  dollar.  After  much  deliberation,  they 
put  their  entire  capital  into  a  half  box  of  oranges,  which  they 
peddled  around  to  the  retail  stores.  This  enterprise  was 
so  easy  and  profitable  that  next  day  they  invested  their  money 
in  gooseberries.  But  when  the  berries  were  only  half  sold, 
the  boys  ran  into  a  crowd  of  roystering  miners,  who  threat- 
ened to  take  away  their  berries.  This  frightened  the  two 
little  fruit-jobbers  into  selling  the  remainder  of  their  stock 
at  cost  to  the  nearest  shopkeeper. 

THE    CARNEGIES    CROSS    THE    OCEAN 

In  1848  the  steam-loom  was  driving  the  hand-weavers  of 
Scotland  out  of  business  and  bringing  misery  to  many  a  cot- 
tage. It  is  a  peculiar  coincidence  that  it  was  the  new  steel 
machinery  that  forced  the  elder  Carnegie  to  emigrate  to 
Pittsburgh,  and  that  it  was  the  younger  Carnegie  who  after- 
wards became  the  master  of  the  new  machinery  and  the 
American  Emperor  of  Steel.  The  poverty-driven  family — 
father,  mother,  Andy,  aged  thirteen,  and  Tom,  aged  six — 
zigzagged  across  the  ocean  on  the  little  schooner  Wiscasset 

69 


THE   ROMANCE   OF   STEEL 

and  reached  port  in  forty-nine  days.  It  would  require  fifteen 
Wiscassets  to  carry  the  load  of  a  single  one  of  the  big  ore 
boats  that  ply  to-day  between  Conneaut  and  Duluth,  but  in 
those  days  she  was  considered  fairly  large  and  fairly  fast. 

The  exact  address  of  the  Carnegies  in  their  new  home 
was  "  Barefoot  Square,  Slabtown,  Allegheny,  Pennsylvania." 
Three  of  the  thrifty  family  immediately  found  work.  The 
father  secured  a  job  in  a  cotton-mill ;  Andrew  went  to  work 
in  the  same  mill  as  bobbin-boy,  with  weekly  wages  of  a  dollar 
and  twenty  cents;  and  the  mother  helped  out  by  taking  in 
washing,  and  by  binding  boots  for  a  shoemaker  named 
Phipps,  who  had  a  small  shop  next  door.  This  shoemaker 
had  a  ten-year-old  son  named  Harry.  In  the  evenings  the 
two  little  child  workers,  Andy  and  Harry,  laid  the  foundation 
of  a  friendship  and  partnership  that  meant,  in  after  life, 
power  and  fortune  for  both. 

The  Carnegies  saved  every  possible  cent,  and  when  the 
father  died,  seven  years  later,  they  had  bought  and  paid  for 
the  small  black  frame  house  in  which  they  lived.  After 
Andrew  had  been  a  bobbin-boy  for  a  year,  he  was  promoted 
to  be  a  stoker  for  a  furnace  in  a  cellar,  with  a  raise  in  wages  of 
sixty  cents  a  week.  He  had  partial  charge  of  a  small  engine, 
and  the  work  was  hard  and  responsible.  One  evening  his 
father  came  in  with  cheerful  news. 

"  Andy,  I  ran  across  J.  Douglas  Reid  to-day,  who  used  to 
live  in  Dunfermline.  He's  doing  well  in  the  telegraph  busi- 
ness here,  and  he  says  he'll  give  you  a  job  as  messenger  boy 
at  three  dollars  a  week." 


CARNEGIE    IN    A    TELEGRAPH    OFFICE 

And  so,  when  he  was  fifteen,  Andrew  climbed  out  of  his 
dark  cellar  and  entered  the  gayer  and  more  adventurous  world 
of  commerce.  Telegraph  offices  have  always  been  notably 

70 


THOMAS    A.    SCOTT 


THE   RISE   OF   ANDREW  CARNEGIE 

good  schools  for  the  breeding  of  bright  boys,  and  this  particu- 
lar office  appears  to  have  been  a  veritable  Eton  in  this  respect. 
Among  the  lads  who  sat  beside  Andrew  Carnegie  on  the 
wooden  bench  were  Robert  Pitcairn,  now  one  of  the  highest 
officials  of  the  Pennsylvania  Railroad;  David  McCargo, 
afterward  superintendent  of  the  Allegheny  Railroad;  and 
William  C.  Moreland,  who  became  city  attorney  of  Pitts- 
burgh. The  foreman  in  charge  of  these  boys,  Jacob  H.  Lar- 
combe,  is  still  alive,  and  Mr.  Carnegie  has  recently  given  him 
a  pension  of  seventy-five  dollars  a  month. 

"  He  was  kind  to  us  boys,"  said  the  steel  king. 

"Break  orders  to  save  owners,"  has  always  been  one  of 
Mr.  Carnegie's  favourite  mottoes;  and  he  began  early  to  fol- 
low it  himself.  One  morning  when  the  operator  was  absent,  a 
message  was  signalled  from  Philadelphia.  The  boys  were 
forbidden  to  take  despatches,  but  young  Andrew  jumped  to 
the  instrument  and  received  it.  When  the  operator  arrived 
and  found  that  the  message  was  perfectly  correct,  the  young- 
ster was  not  only  forgiven,  but  promoted  to  be  an  operator, 
with  a  salary  of  three  hundred  dollars  a  year.  At  nineteen, 
having  attracted  the  notice  of  Colonel  Thomas  A.  Scott,  who 
was  at  the  head  of  the  Pennsylvania  Railroad  interests  in 
Pittsburgh,  he  was  again  moved  higher,  and  became  a  rail- 
way operator,  with  four  hundred  and  twenty  dollars  a 
year. 

Soon  afterward,  during  the  absence  of  Colonel  Scott  from 
his  office,  an  accident  was  reported  on  one  of  the  lines,  which 
tied  up  the  road.  Young  Carnegie  acted  at  once.  With  a 
dozen  telegrams,  each  signed  "Thomas  A.  Scott,"  he  set  the 
trains  in  motion  and  prevented  a  costly  blockade.  For  this 
"lawless  initiative"  he  was  made  Scott's  private  secretary, 
and  favorite  protege.  It  was,  in  fact,  the  colonel's  friend- 
ship that  gave  Carnegie  his  first  real  footing  in  the  commer- 
cial world. 


THE   ROMANCE   OF   STEEL 

THE    BEGINNINGS    OF   A    GREAT    FORTUNE 

As  private  secretary  of  the  most  influential  railroad  magnate 
in  Pittsburgh,  he  was  in  a  position  where  all  manner  of  spe- 
cial privileges  dropped  into  his  ready  hands.  The  first  plum 
came  in  the  shape  of  a  chance  to  buy  ten  shares  in  the  Adams 
Express  Company,  at  sixty  dollars  a  share.  His  mother  raised 
five  hundred  dollars  by  mortgaging  the  little  home;  Colonel 
Scott  lent  him  the  remaining  hundred;  and  he  became  a 
capitalist.  Every  month  he  received  a  dividend  of  six  dollars, 
which  opened  his  eyes  to  the  magic  of  share-holding.  To 
find  that  he  could  make  money  earn  profits  for  him  was  a 
new  discovery. 

Although  he  could  save  little  out  of  his  salary  of  fifty  dollars 
a  month,  he  was  soon  the  possessor  of  shares  in  a  heterogeneous 
collection  of  enterprises,  all  being  in  some  way  related  to  rail- 
roading. Some,  not  all,  of  these  enterprises  were  as  follows: 

The  WoodrufI  Sleeping  Car  Company. 

The  Columbia  Oil  Company. 

The  Duck  Creek  Oil  Company. 

The  Dutton  Oil  Company. 

The  Pittsburgh  Elevator  Company. 

The  Citizens'  Passenger  Railroad  Company. 

The  Birmingham  Passenger  Railroad  Company. 

The  Third  National  Bank  of  Pittsburgh. 

A  locomotive  works  and  a  bridge  works,  both  of  which 
he  himself  organised. 

For  ten  years,  from  1855  to  ^65,  Andrew  Carnegie  was 
an  active  little  commercialist  butterfly,  flitting  from  venture 
to  venture,  but  remaining  in  the  service  of  the  Pennsylvania 
Railroad,  and  succeeding  Colonel  Scott  as  superintendent 
when  he  was  twenty-eight.  One  of  the  favourite  maxims  of 
his  later  years  had  not  at  that  time  occurred  to  him — "  Put 
all  your  eggs  in  one  basket  and  then  watch  that  basket."  He 

72 


THE   RISE   OF   ANDREW   CARNEGIE 

found  that  banks  would  lend  him  money,  that  inventors  and 
promoters  sought  his  assistance,  and  that  his  note  was  almost 
equal  to  legal  tender  among  many  Pittsburgh  business  men. 
His  first  thousand  dollars  was  made  in  an  oil  speculation, 
and  without  the  investment  of  a  cent.  He  gave  his  note  in 
return  for  a  block  of  stock,  and  then  paid  for  the  stock  out 
of  the  dividends.  The  company  bought  the  Storey  Farm, 
famous  among  oil  men,  for  forty  thousand  dollars;  and  before 
many  years  the  market  value  of  the  shares  was  five  million 
dollars.  In  a  single  year  the  cash  dividends  amounted  to 
several  times  the  cost  of  the  farm. 


CARNEGIE    ENTERS    THE    IRdN    BUSINESS 

Just  about  the  time  when  Captain  Ward  bought  the  Kelly 
and  Mushet  patents  and  began  to  make  steel,  Andrew  Car- 
negie first  took  notice  of  the  profitableness  of  the  iron  business. 
On  May  2,  1864,  he  paid  Thomas  N.  Miller  eight  thousand 
nine  hundred  and  twenty-five  dollars  for  a  one-sixth  interest 
in  the  Iron  City  Forge  Company,  the  other  shareholders, 
besides  Miller,  being  Andrew  Kloman  and  Henry  Phipps. 
The  company  was  making  money.  The  price  of  axles,  which 
were  its  specialty,  had  soared  from  two  cents  a  oound  to 
twelve. 

At  this  time  Carnegie  organised  the  Keystone  Bridge  Com- 
pany. He  succeeded  in  placing  stock  in  the  hands  of  J. 
Edgar  Thomson,  president  of  the  Pennsylvania  Railroad; 
Colonel  Scott,  now  vice-president;  and  a  number  of  minor 
officials.  The  company,  which  was  successful  from  the  first, 
paid  dividends  of  twenty-five  per  cent.  In  four  years  Car- 
negie had  paid  for  his  stock  out  of  its  profits.  While  the 
Keystone  Bridge  Company  was  by  no  means  the  first  to  build 
iron  bridges,  it  became,  with  the  powerful  backing  of  the 
Pennsylvania  Railroad,  the  most  prosperous  bridge  company 

73 


THE   ROMANCE   OF  STEEL 

in  the  United  States.  Mechanically,  its  success  was  due  to 
the  ability  of  three  bridge-makers  named  Piper,  Shiffler,  and 
Linville ;  financially,  it  was  due  to  the  diplomacy  of  Andrew 
Carnegie  in  floating  the  stock  among  railway  men. 

Elated  by  this  quick  and  easy  method  of  obtaining  wealth, 
Carnegie  resigned  his  position  as  railroad  superintendent, 
and  never  afterward  held  any  salaried  place.  He  now  be- 
came a  capitalist.  He  was  in  the  iron  business  largely  by 
accident,  and  not  by  any  preference.  After  the  Civil  War, 
when  prices  fell  and  new  grooves  had  to  be  made  for  the 
industry,  he  regretted  having  entered  upon  such  a  "  hazardous 
enterprise."  For  three  years  the  Kloman-Miller-Phipps- 
Carnegie  company  made  barely  enough  to  keep  out  the 
sheriff.  There  were  practically  no  dividends.  Again  and 
again  Miller,  who  was  the  wealthiest  of  the  partners,  had  to 
advance  the  money  to  pay  the  workmen's  wages.  Sometimes 
the  workmen  had  to  be  paid  in  orders  for  groceries  on  a  local 
store. 

"  It  is  no  credit  to  any  of  us  that  we  did  not  'bust'  twenty 
times,"  said  Miller. 

Andrew  Carnegie,  who  took  a  nine  months'  jaunt  through 
Great  Britain  as  soon  as  he  had  thrown  off  his  railroad  cares, 
said: 

"When  I  returned,  I  found  the  Union  Iron  Mills,  in  my 
opinion,  going  as  fast  as  they  could  into  bankruptcy." 

"  Carnegie  had  his  share  of  hard  times  when  he  began," 
said  a  white-haired  Pittsburgh  puddler.  "  I  have  seen  the 
time  when  he  would  have  to  pawn  a  pile  of  pig  iron  to  get 
ready  money.  Then  we  puddlers  couldn't  touch  the  pig  until 
the  storage  company  came  and  released  it." 

But  Carnegie  had  the  virtues  of  inertia  as  well  as  of  enter- 
prise. He  refused  to  quit  the  water-logged  hulk,  even  when 
shipwreck  seemed  inevitable.  His  partners  were  wrangling 
and  threatening  to  make  one  another  walk  the  plank.  The 

74 


THOMAS    N.    MILLER 


OFTHE 

UNIVERSITY 

OF 


THE   RISE   OF   ANDREW  CARNEGIE 

puddlers  were  on  strike.  Miller  was  discouraged,  and  decided 
to  drop  out;  whereupon  Carnegie  promptly  offered  to  buy 
his  holdings.  Instead  of  Miller  being  ejected  by  Carnegie, 
as  has  often  been  asserted,  he  was  delighted  to  get  rid  of  his 
stock  at  thirty-two  dollars  a  share.  In  this  way  Carnegie 
bought  for  seventy-three  thousand  six  hundred  dollars  a  little 
package  of  printed  paper  which  thirty-four  years  afterward 
he  sold  to  the  United  States  Steel  Corporation  for  millions. 
"Luck!"  reflects  Miller.  "Foresight!"  claims  Carnegie. 
There  was  probably  a  little  of  both  elements  in  the  trans- 
action. 

In  a  few  months  the  storm  had  cleared.  The  waves  sub- 
sided. The  wind  shifted  to  the  rear.  The  sun  broke  out 
overhead.  So  it  was  always  in  the  whimsical  iron  and  steel 
business  of  earlier  days.  Vast  and  undetected  social  causes 
were  forever  making  sport  of  it,  speeding  it  toward  the 
golden  isles  or  dashing  it  on  the  rocks.  The  most  apparent 
cause  of  its  sudden  activity  in  1868  was  the  boom  in  railroad- 
building.  Between  1866  and  1872  the  total  mileage  in  the 
United  States  was  practically  doubled,  and  the  iron  men 
worked  themselves  breathless  to  supply  the  demand. 

CARNEGIE   AS   A   BUSINESS    MAN 

Carnegie's  chief  asset  at  that  time — the  friendship  of  rail- 
road men — made  him  beyond  a  doubt  the  most  useful  of  all 
the  partners.  Seldom  has  there  been  an  abler  drummer. 
Week  after  week  he  arrived  at  the  office  with  a  smile  of  vic- 
tory, and  tossed  to  Phipps,  his  plodding  partner,  contracts 
bulging  with  profit.  He  was  not,  and  has  never  been,  a 
practical  maker  of  iron  and  steel.  The  only  occupations  in 
which  he  served  any  apprenticeship  were  telegraphy  and 
railroading.  But  his  success  in  securing  profitable  orders  at 
this  time  was  what  mainly  put  the  balance  on  the  right  side 

75 


THE   ROMANCE   OF   STEEL 

of  the  ledger.  After  all,  the  chief  end  of  commerce  is  to 
sell  goods. 

Even  the  strike  of  the  puddlers  brought  good  fortune.  One 
of  the  imported  strike-breakers,  John  Zimmer,  showed  the 
partners  how  to  build  an  improved  plate-mill,  the  first  of  its 
kind  in  the  United  States.  It  is  now  known  as  the  Universal 
Mill.  This  at  once  added  thousands  to  the  firm's  profits,  and 
since  that  date  has  been  the  means  of  pouring  millions  into 
the  iron  and  steel  treasury.  In  fact,  that  greatest  of  all  slab- 
bing-mills  at  Homestead,  which  produces  a  steady  stream  of 
thirty  thousand  tons  of  steel  slabs  a  month,  is  descended 
directly  from  the  original  Zimmer  mill  built  by  the  German 
strike-breaker  forty  years  ago. 

With  the  exception  of  Kloman,  the  partners  had  all  been 
boyhood  friends.  Miller,  Phipps,  and  the  two  Carnegie  boys 
had  been  child  workers  together  in  Allegheny.  Together 
they  had  gone  to  borrow  books  from  the  kindly  Colonel 
Anderson,  and  together  they  had  discussed  the  campaigns  of 
George  Washington  and  the  heroes  of  Sir  Walter  Scott. 
They  had  sat  side  by  side  in  the  same  Swedenborgian  Sunday 
School,  and  rehearsed  together  in  the  same  singing-class. 
Whenever  they  had  a  holiday,  which  was  seldom,  they  went 
on  long  rambles  together  upon  the  cliffs  or  along  the  river's 
bank. 

They  appear  to  have  been  far  superior  to  ordinary  boys. 
There  was  some  method  even  in  their  play.  Andrew's  greater 
assertiveness  made  him  the  natural  leader  of  the  little  group, 
although  in  several  special  boyish  attainments  he  was  outdone 
by  the  others.  At  first  Miller  climbed  up  more  quickly  than 
the  rest,  and  gave  all  three  their  start  in  the  iron  business.  He 
rose  to  be  the  purchasing  agent  of  the  Fort  Wayne  Railroad; 
in  this  way  he  became  acquainted  with  Kloman,  and  got  part- 
nerships for  his  young  chums.  To  Phipps,  he  lent  sixteen 
hundred  dollars  to  buy  a  share  from  Kloman,  and  afterward 

76 


THE   RISE   OF   ANDREW   CARNEGIE 

introduced  the  Carnegies,  first  Tom  and  then  Andrew.  The 
average  age  of  the  four  partners,  when  they  began  their  iron- 
making  careers  in  1865,  was  only  twenty-seven;  but  for  more 
than  a  dozen  years  they  had  been  partners  in  play  and  in 
ambition. 

CARNEGIE  AS  AN  AUTHOR 

The  question  has  often  been  asked:  "  Does  Mr.  Carnegie 
write  his  own  books?  Is  it  possible  that  so  busy  a  man  should 
produce  half  a  dozen  volumes  or  does  he  employ  some  secre- 
tarial proxy?"  In  the  course  of  my  digging  and  delving  I 
have  discovered  a  manuscript  which  should  settle  this  dis- 
puted question  once  for  all.  The  fact  is  that  not  only  has  he 
been  a  constant  reader  of  good  books,  but  he  was  also  in  his 
boyhood  a  writer  of  fluency  and  force.  Here,  for  instance, 
is  a  paragraph  of  Carnegian  rhetoric,  from  an  essay  on 
"  Labour,"  written  when  he  was  fifteen  for  a  Pittsburgh  paper, 
but  never  published: 

Labour  is  the  universal  law  of  our  being.  Nature  does  not  give  us  any 
finished  product.  Man  must  eat  his  bread  in  the  sweat  of  his  brow  or  not  at 
all.  Idleness  should  be  unthroned,  and  Industry  crowned  in  her  stead.  It 
is  high  time  that  drones  should  occupy  at  least  the  lowest  position  in  society. 
A  working-man  is  a  more  useful  citizen  and  ought  to  be  more  respected  than 
an  idle  prince. 

Carnegie  reiterated  the  latter  opinion  fifty-five  years  later 
when  he  said: 

"I  would  prefer  to  have  my  niece  marry  an  honest  work- 
ingman  than  a  worthless  duke." 

His  ambition  appears  in  a  letter  written  to  an  uncle  in 
Scotland  when  he  was  seventeen  years  of  age,  in  which  he 
says: 

I  gave  up  my  position  as  a  telegrapher  because  I  could  only  work  up  to 
six  or  seven  hundred  a  year.  Opportunity  for  advancement  is  better  than 
higher  wages. 

77 


THE   ROMANCE   OF   STEEL 

This  was  immediately  after  he  had  accepted  a  position 
under  Colonel  Scott  at  thirty-five  dollars  a  month.  And  the 
news  that  he  had  by  this  time  become  a  patriotic  young  Amer- 
ican is  shown  in  the  statement  in  this  letter  that  George 
Washington  was  fully  as  great  hero  as  Wallace  or  Bruce. 

Another  fact  concerning  his  literary  acquirements  which 
is  not  generally  known  is  that  he  received  a  thorough  educa- 
tion at  the  hands  of  tutors  as  soon  as  he  could  afford  the  time 
and  money  to  obtain  it.  In  1867,  when  he  evolved  into  a  cap- 
italist and  was  making  his  home  at  the  St.  Nicholas  Hotel,  in 
New  York,  he  resolutely  went  through  a  long  course  of  study. 
Travel  and  education  were  what  he  bought  with  his  first 
money. 

CARNEGIE'S  THREE  EARLY  PARTNERS 

Of  the  other  partners,  Henry  Phipps  was  the  exact  antip- 
odes of  Andrew  Carnegie.  He  was  a  master  of  detail,  an 
engineer  of  economies.  The  workmen  found  that  he  had  a 
miscroscopic  eye.  No  small  waste  or  extravagance  escaped 
his  notice.  Beginning  as  a  jeweller's  errand-boy,  he  had  risen 
to  be  the  bookkeeper  of  a  spike-mill  concern.  He  was  faith- 
ful. He  was  plodding.  He  was  energetic.  For  years,  when 
the  Kloman-Miller-Carnegie-Phipps  company  was  too  poor 
to  hire  a  bookkeeper,  he  trudged  three  miles  every  week-day 
evening,  from  the  spike-mill  to  the  iron-works,  posted  the 
books,  and  trudged  back  home  to  Slabtown,  Allegheny  City. 
There  were  no  street-cars  in  1865,  and  if  there  had  been,  the 
thrifty  Phipps  would  probably  have  regarded  ten  cents  as  too 
high  a  price  to  pay  for  avoiding  a  mere  six-mile  walk  along  a 
canal-bank. 

He  was  not  fond  of  publicity.  The  task  in  hand,  whatever 
it  happened  to  be,  monopolised  his  whole  attention.  Appar- 
ently, as  he  rummaged  about  on  the  iron-works  junk-heap, 
or  dickered  to  get  half  a  dollar  taken  off  a  coal  bill,  there 

78 


THE   RISE   OF   ANDREW   CARNEGIE 

were  no  visions  in  his  mind  of  a  golden  future  with  the  stately 
Beaufort  Castle  in  the  background.  While  Carnegie  was 
using  all  his  railroad  influence  and  all  his  arts  of  diplomacy 
to  get  the  highest  possible  prices  for  their  goods,  Phipps  was 
pushing  the  cost-line  down  to  a  level  it  had  never  reached 
before.  In  such  a  quiet,  self-obliterating  way  did  he  carry 
on  his  work  that  few  outside  of  his  partners  knew  his  value 
to  the  company. 

Phipps  was  the  financier  of  the  group.  None  could  face 
an  insistent  banker  as  well  as  he. 

"What  we  used  to  admire  in  young  Phipps  was  the  skilful 
way  in  which  he  could  keep  a  check  in  the  air  for  two  or 
three  days,"  said  the  president  of  one  of  the  Pittsburgh  banks 
of  that  time. 

The  old  black  mare,  Gypsy,  which  he  drove  on  his 
daily  rounds,  became  so  familiar  with  her  duties  that  she 
would  criss-cross  from  bank  to  bank  of  her  own  accord.  After- 
ward, when  prosperity  came  to  the  partners,  it  was  said  to 
be  impossible  to  drive  Gypsy  in  a  straight  line  through  the 
banking  section  of  Pittsburgh. 

Andrew  Kloman  had  learned  his  trade  in  Prussia,  and  he 
had  progressed  far  beyond  his  teachers.  He  was  probably 
unequalled  in  Pittsburgh  as  a  mechanical  genius.  He  had 
little  business  ability.  In  disposition  he  was  somewhat  sus- 
picious and  irascible,  and  frequently  had  to  be  soothed  and 
mollified  by  his  younger  partners;  but  in  the  iron-mill,  among 
his  workmen,  he  had  no  superior  in  his  day.  He  came  into 
notice  in  the  industrial  world  by  making  a  fine  quality  of  car- 
axles,  by  a  process  of  his  own  invention.  He  worked  with 
German  thoroughness,  and  also  with  the  help  of  an  inventive 
brain.  He  created  a  dozen  or  more  devices  and  machines 
before  he  severed  his  connection  with  the  company. 

As  for  Tom  Carnegie,  the  youngest  of  the  partners,  he  was 
a  very  important  partner  at  the  Pittsburgh  end  of  the  busi- 

79 


THE   ROMANCE   OF   STEEL 

ness.  He  was  one  of  the  most  popular  men  in  Allegheny 
County.  Every  man  who  shook  his  hand  and  looked  into  his 
honest  black  eyes  became  his  friend.  He  was  absolutely  trust- 
worthy. His  "  Yes  "  was  "  Yes,"  and  his  "  No  "  was  "  No." 
He  was  the  borrower  and  the  peacemaker  of  the  company. 
Again  and  again  he  saved  the  young  firm  from  trouble  by 
converting  friendship  into  cash.  He  was  no  talker;  but  " Tom 
Carnegie's  word  is  better  than  most  men's  bond,"  was  a  saying 
in  Pittsburgh  which  illustrates  the  respect  which  he  received. 

He  lacked  his  elder  brother's  restless  ambition.  Left  to 
himself,  Thomas  M.  Carnegie  would  probatjy  never  have 
been  numbered  among  the  thousand  millionaires  of  iron  and 
steel ;  but  his  integrity,  his  business  sense,  and  his  social  quali- 
ties made  him  a  very  necessary  part  of  the  combination.  He 
and  Miller  married  sisters,  the  daughters  of  William  Cole- 
man,  one  of  the  richest  and  ablest  of  Pittsburgh's  ironmasters; 
and  these  marriages,  as  we  shall  see,  brought  Coleman  into 
the  company  and  added  greatly  to  its  standing. 

All  five  partners  were  self-made  men.  They  had  been 
pushed  out  on  the  cobblestones  in  boyhood  with  little  or  no 
schooling.  They  had  never  owned  a  dollar  which  they  had 
not  earned.  They  were  the  sons  of  workingmen,  children  of 
the  masses.  They  had  no  social  standing,  if  such  an  item 
were  considered  in  Pittsburgh  during  the  sixties.  They  were 
only  five  out  of  the  twenty-five  thousand  grimy  men  whose 
sweat  and  thought  and  skill  built  up  the  Smoky  City  between 
its  rivers.  True,  they  were  helped  from  the  beginning  by 
the  friendship  of  wealthier  men,  but  they  had  merited  that 
friendship  by  their  energy  and  ability.  This  is  not  a  story  of 
luck.  It  is  a  story  of  daring — persistent  and  successful 
daring. 

CARNEGIE   AS    A    BOND-BROKER 

The  men  were  self-made,  but  the  business  was  not.    It  did 
not  enlarge  itself  out  of  its  own  profits,  according  to  the  con- 
So 


HENRY    PHIPPS 


THE   RISE   OF   ANDREW  CARNEGIE 

ventional  ideas  of  thrift  and  diligence.  If  it  had  depended 
upon  its  own  dividends  for  its  development,  it  is  not  likely 
that  its  biography  would  have  been  of  national  interest.  In 
order  to  get  more  capital,  one  of  the  partners  had  to  turn 
bond-broker,  and  the  others  had  to  launch  into  a  real-estate 
speculation.  It  was  this  versatility,  this  readiness  for  risks 
and  adventures,  which  more  than  anything  else  put  the  Car- 
negie Steel  Company  ahead  of  its  competitors. 

Early  in  1872  Andrew  Carnegie  received  a  letter  from 
Colonel  Scott,  his  former  employer,  requesting  him  to  call 
at  the  office  of  the  Pennsylvania  Railroad  Company. 

"Big  business,  Andrew!"  said  Scott,  as  Carnegie  entered 
the  office.  "  Do  you  think  you  can  handle  a  six-million-dollar 
deal  for  us?" 

"  I  can,"  replied  Carnegie,  self-confident  and  undaunted, 
although  up  to  this  time  he  had  not  had  any  personal  experi- 
ence with  the  word  "  million." 

"Well,"  said  Scott,  "we're  planning  to  build  a  branch  road 
to  Davenport,  Iowa,  and  we  want  to  place  six  million  dollars' 
worth  of  the  bonds  abroad.  This  is  the  best  chance  you  ever 
had  to  make  a  big  lump  of  money  in  a  little  while,  if  you 
are  successful.  Of  course  if  you  fail  you  get  nothing." 

Carnegie  packed  the  bonds  in  his  valise  and  sailed  at  once. 
He  had  letters  of  introduction  to  European  financiers  and  he 
presented  his  case  with  such  enthusiasm  that  every  bond  was 
sold.  His  commissions  amounted  to  a  hundred  and  fifty  thou- 
sand dollars.  The  transaction,  which  more  than  doubled  his 
fortune,  was  his  first  great  uplift,  financially,  though  it  after- 
ward proved  somewhat  unfortunate  in  other  respects.  The 
bonds,  through  no  fault  of  Carnegie,  depreciated,  and  the 
buyers  lost  a  great  part  of  their  money. 

Three  months  after  he  returned,  Colonel  Scott  gave  him  a 
second  block  of  bonds  to  sell,  and  his  commissions  added 
seventy-five  thousand  dollars  more  to  his  coffers.  Thus  a 
few  weeks'  work  as  a  bond-broker  netted  him  two  hundred 

81 


THE   ROMANCE   OF   STEEL 

and  twenty-five  thousand  dollars,  and  enabled  him  to  be- 
come, for  the  first  time,  the  principal  stockholder  in  the  iron- 
making  enterprise. 

While  he  was  in  England,  his  partners  and  several  friends 
became  co-operators  in  a  real-estate  speculation.  They 
bought  a  large  tract  of  land  in  Pittsburgh,  called  the  Mowry 
Homestead,  and  subdivided  it  into  building  lots.  These  lots 
sold  quickly  and  at  a  high  price,  so  that  when  Carnegie 
returned,  they,  too,  had  some  surplus  money  for  investment. 
Among  the  speculators  were  William  Coleman,  the  father- 
in-law  of  Thomas  Carnegie,  and  a  well-known  Pittsburgh 
merchant  named  David  McCandless,  who  had  been  a  mem- 
ber of  the  little  Swedenborgian  church  which  was  attended 
by  the  Carnegie  family.  And  so,  by  these  two  successful 
get-rich-quick  adventures,  nearly  a  quarter  of  a  million  dol- 
lars was  made  available,  more  than  the  partners  could  have 
accumulated  in  many  a  long  year  of  iron-making. 

CARNEGIE  AND  THE  BESSEMER  PROCESS 
William  Coleman  was  the  first  of  the  group  to  suggest  the 
making  of  steel  by  the  Bessemer  process.  Oddly  enough, 
Andrew  Carnegie  was  the  chief  objector.  At  this  time  the 
future  steel  king  was  living  in  New  York,  picking  up 
whatever  he  could  in  the  line  of  negotiating  securities,  and 
apparently  without  any  definite  plans  as  to  the  future.  As 
Coleman  had  been  a  manufacturer  of  iron  rails,  he  could  best 
appreciate  what  the  Bessemer  process  meant  to  the  industrial 
world.  He  visited  Morrell  in  Johnstown,  Chisholm  in 
Cleveland,  and  Holley  in  Troy,  and  observed  their  plants  in 
operation.  First  he  won  over  Thomas  Carnegie  to  his  pro- 
posal to  build  a  steel  plant,  and  then  McCandless ;  but  Andrew 
Carnegie  stood  aloof  and  said: 

"  Pioneering  doesn't  pay  a  new  concern.  Wait  till  the 
process  develops." 

82 


DAVID    MCCANDLESS 


THE   RISE   OF   ANDREW   CARNEGIE 

The  new  steel-making  was  still  an  experiment  in  the  United 
States.  It  was  doubtful  whether  a  single  American  plant  had 
as  yet  made  it  a  commercial  success.  But  during  his  visits 
to  England,  as  early  as  1866,  Carnegie  watched  the  develop- 
ment of  the  process  with  interest.  He  fully  realised  the 
growing  demand  for  cheap  steel.  At  Derby  he  saw  a  crucible 
steel  rail  which  had  been  laid  down  fifteen  years  before  and 
was  still  in  good  order.  He  was  told  that  the  traffic  was  so 
heavy  at  this  point  that  the  iron  rails  were  formerly  renewed 
every  three  months. 

A  few  years  later  he  was  fully  converted  to  the  new  process, 
and  saw  for  the  first  time  the  convincing  spectacle  of  a  Besse- 
mer converter  in  full  blast.  From  that  moment  the  word 
"  steel  "  was  stamped  upon  his  mind  with  a  white-hot  impress. 
Nothing  that  he  had  ever  seen  was  as  picturesque — as  fasci- 
nating— as  miraculous  in  its  easily  controlled  force  and  fury. 
It  was  half  a  furnace  and  half  a  cyclone,  yet  it  was  obedient 
to  the  touch  of  a  boy's  hand.  Give  it  thirty  thousand  pounds 
of  common  pig  iron,  and  presto!  the  whole  mass  was  blown 
into  steel.  As  Carnegie  stood  beneath  its  volleys  of  orange 
and  yellow  sparks,  his  own  mind  became  converted.  The 
sudden  blast  of  his  ambition  and  resolve  blew  away  the  lure 
of  financial  life  and  the  promises  of  speculation.  Nothing 
was  left  but  steel. 

As  quickly  as  steam  could  push  him  through  water  and  pull 
him  over  land,  he  rushed  to  Pittsburgh.  His  partners  had  been 
discussing,  reflecting,  estimating,  hesitating.  His  enthusiasm 
swept  their  hesitancy  into  decision,  and  the  firm  of  Carnegie, 
McCandless  &  Company  was  organised  at  once  with  a  capi- 
tal of  seven  hundred  thousand  dollars.  Andrew  Carnegie 
put  in  all  his  bond-brokerage  profits  and  twenty-five  thousand 
dollars  besides;  Coleman  subscribed  a  hundred  thousand,  and 
Kloman,  Phipps,  McCandless,  Shinn,  Scott,  Stewart,  and 
Thomas  Carnegie  put  in  fifty  thousand  apiece.  Shinn  came 

83 


THE   ROMANCE   OF   STEEL 

into  the  new  concern  as  a  friend  of  McCandless,  and  Scott 
and  Stewart  were  neighbours  of  Thomas  Carnegie's. 

THE  EDGAR  THOMSON  STEEL  WORKS 

Carnegie  and  Coleman  had  picked  out  a  tract  twelve  miles 
from  Pittsburgh  containing  more  than  a  hundred  acres,  which 
was  notable  as  the  spot  on  which  General  Braddock  was  de- 
feated by  the  French  and  Indians  in  1755.  Alexander  L. 
Holley  took  the  contract  to  draw  up  the  plans  for  the  new 
plant;  Captain  "Bill"  Jones,  taking  a  hint  from  his  friend 
Holley,  arrived  just  in  time  to  be  put  in  charge  of  it;  and 
in  this  way  the  famous  Edgar  Thomson  Steel  Works  was 
launched  upon  its  victorious  career. 

The  partners  had  tactfully  named  the  works  after  the  influ- 
ential president  of  the  Pennsylvania  Railroad;  and  this  little 
act  of  foresight  helped  to  fill  the  cash-drawer. 

A  system  of  rebates — at  that  time  not  contrary  to  law — was 
established,  which  enabled  the  steel-makers  to  ship  their 
freight  cheaper  than  their  smaller  competitors.  The  reason 
given  for  this  rebate  system  was  that  the  steel  men  saved 
expense  to  the  railroad  by  loading  and  unloading  their  own 
cars  and  making  up  their  own  trains.  Thus  in  various  ways 
Andrew  Carnegie's  influence  with  his  former  employers 
proved  to  be  a  most  valuable  asset. 

All  the  partners  in  the  new  firm  were  active.  Andrew 
Carnegie,  Scott,  and  Stewart  drummed  up  orders.  McCand- 
less  and  Coleman  furnished  the  prestige  and  business  experi- 
ence. Kloman,  in  blue  blouse  and  overalls,  looked  after  the 
men  and  machinery.  Shinn  was  general  manager,  and  soon 
had  the  business  so  well  organised  that  he  could  account  for 
every  quart  of  oil  or  pound  of  nails.  Phipps  was  in  and  out 
of  every  department,  suggesting  improvements  and  econo- 
mies. And  Thomas  Carnegie  was  a  sort  of  emergency  man, 
minimising  friction  at  all  points. 

84 


THE   RISE   OF   ANDREW   CARNEGIE 

A  friend  of  the  partners  said  at  the  time,  describing  the 
new  firm: 

"Shinn  bossed  the  show;  McCandless  lent  it  dignity  and 
standing;  Phipps  took  in  the  pennies  at  the  gate  and  kept  the 
pay-roll  down;  Tom  Carnegie  kept  everybody  in  a  good 
humour;  and  Andy  looked  after  the  advertising  and  drove 
the  bandwagon." 

There  is  more  wit  than  truth  in  this  estimate  of  Andrew 
Carnegie's  value  to  the  company,  as  he  had  organised  it,  fur- 
nished more  than  one-third  of  the  capital,  buttressed  it  with 
wealthy  friends,  and  secured  the  largest  and  most  profitable 
orders. 

Andrew  Carnegie's  speaking  part  in  the  steel  drama  did 
not  call  for  modesty  and  self-obliteration.  To  climb  high 
in  the  social  scale,  to  keep  always  in  the  public  eye,  to  secure 
the  friendship  of  statesmen  and  financiers — all  this  was  but 
the  means  to  an  end.  It  was  no  more  than  the  scaffolding 
around  the  iron  and  steel  works,  by  means  of  which  the  works 
were  developed  beyond  the  reach  of  competitors.  Every 
cubit  that  Mr.  Carnegie  added  to  his  social  stature  elevated 
the  whole  business  structure  with  which  he  was  connected. 
By  his  extraordinary  intellectual  ability,  his  versatility  as  an 
entertainer,  his  knowledge  of  celebrities,  his  constant  globe- 
trotting, his  cheery  disposition  and  wide  range  of  conversa- 
tion, he  became  a  welcome  guest  in  the  drawing-rooms  of 
New  York  and  Washington.  And  always  and  everywhere 
he  was  a  man  of  business.  His  purpose  was  to  sell  steel  billets 
and  steel  rails. 

THE  SECRET  OF  CARNEGIE'S    SUCCESS 

He  realised  to  the  full  the  commercial  value  of  prominence 
and  friendship.  While  his  competitors  buried  themselves  in 
dingy  shops  and  offices,  and  allowed  business  cares  to 
worry  them  into  nervous  prostration,  Carnegie  placed  him- 

85 


THE   ROMANCE   OF   STEEL 

self  where  he  could  survey  the  whole  field  and  lay  larger 
plans  than  the  old-fashioned  steel-makers. 

"  Carnegie  owes  a  great  deal  to  his  habit  of  travelling,"  said 
George  Lauder,  his  cousin.  "  While  other  men  were  wallow- 
ing in  details,  he  was  able  to  take  a  wider  view." 

This  was  new,  therefore  unpopular  and  misconstrued.  Car- 
negie had  originated  a  new  business  principle  in  the  steel 
trade — that  big  men  should  do  big  things  and  small  men  do 
small  things.  "  I  never  write  a  letter  that  any  one  else  can 
write  for  me,"  he  said.  "  Mr.  Carnegie  was  not  worth  fifteen 
dollars  a  week  as  a  clerk,"  one  of  his  partners  assured  me. 
But  Carnegie  saw  no  reason  why  he  should  do  a  clerk's  work. 
He  did  his  own  work  well  because  he  did  not  try  to  do  any- 
thing else.  He  initiated  such  a  change  in  business  tactics  as 
had  taken  place  in  military  tactics.  The  other  steel-makers 
of  the  seventies  were  leading  their  workmen  in  person,  just 
as  Harold  led  his  Saxons  and  Leonidas  his  Spartans.  Car- 
negie, like  Wellington  or  Napoleon  or  Oyama,  directed  the 
battle  from  a  near-by  hill,  from  which  he  could  survey  the 
whole  combat  and  manoeuvre  his  forces  to  the  best  advantage. 
He  fought,  but  not  as  the  private  soldier.  He  was  a  general 
of  industry — a  fact  often  overlooked  by  the  captains.  The 
steel  men  of  Pittsburgh,  as  they  plodded  up  and  down  their 
dirty,  half-paved  streets,  shrouded  in  a  perpetual  sooty  fog, 
growled  and  scoffed  at  the  "parlour  knight"  who  won  his 
victories  at  the  banquet  or  in  the  Pullman  car.  But  one  fact 
they  could  not  deny  or  belittle — the  fact  that  he  seldom  lost 
a  battle. 

Carnegie  had  from  boyhood  the  faculty  of  attracting  the 
attention  of  the  great  and  the  rich.  It  was  more  than  a  knack. 
It  was  an  instinct.  And  deep  down  beneath  his  diplomacy 
it  was  based  upon  the  solid  worth  and  forcefulness  of  his 
character.  He  was  as  great  as  they.  Long  before  his  wealth 
had  made  him  famous  he  was  the  personal  friend  of  Gladstone, 

86 


THE   RISE  OF   ANDREW  CARNEGIE 

Rosebery,  Matthew  Arnold,  Herbert  Spencer,  John  Morley, 
and  James  Bryce. 

When  the  young  Prince  of  Wales  visited  this  country,  in 
1860,  there  were  scores  of  telegraph  operators  and  railroad 
men  standing  along  his  line  of  travel ;  but  Andrew  Carnegie 
was  the  only  one  who  sprang  forward  and  offered  the  titled 
stranger  an  exciting  ride  on  a  locomotive.  As  the  two  young 
men — one  a  prince  by  virtue  of  his  birth,  and  the  other  by 
virtue  of  his  competency — clung  to  the  narrow  seat  in  the 
engineer's  cab  and  were  jolted  along  the  crooked  track,  there 
began  the  springtime  of  a  friendship  which  in  its  autumn 
brought  business  to  the  Pittsburgh  steel-mills. 

All  the  wiseacres  of  Pittsburgh  looked  upon  Carnegie's 
social  capers  with  outspoken  disapproval.  Daniel  J.  Mor- 
rell  and  John  Stevenson  refused  to  be  his  partners,  on  the 
grounds  that  he  was  too  flighty  and  speculative.  The  pres- 
ence of  Coleman  and  McCandless  in  the  firm  was  absolutely 
necessary  to  preserve  its  credit,  at  least  during  the  earlier 
years.  One  day  old  John  Moorhead,  the  wealthiest  man  in 
Pittsburgh,  pointed  Carnegie  out  to  a  friend  and  said: 

"There  goes  a  foolish  young  man.  He  has  bitten  off 
more  than  he  can  chew.  He  wasn't  satisfied  to  do  a  small, 
safe  business,  like  the  rest  of  us.  He  had  to  launch  out.  Mark 
my  words — he'll  come  to  grief  yet!" 

Thirty-five  years  ago  Pittsburgh  had  no  prestige  as  an 
iron  and  steel  centre.  It  was  mainly  an  importing  and  dis- 
tributing point.  There  were  only  seven  small  blast  furnaces, 
producing  in  twelve  months  about  as  much  as  one  first-class 
modern  furnace  can  make  in  eight.  Iron  rails  were  made, 
but  no  steel  ones.  Pig  iron  was  scarce  at  forty  dollars  a  ton. 
There  was  nothing,  therefore,  in  the  location  of  the  Carnegie 
mills  which  can  account  for  their  record-breaking  and  profit- 
making  career.  And  as  Mr.  Carnegie's  partners,  without 
exception,  were  only  moderately  successful  before  and  after 

87 


THE   ROMANCE   OF  STEEL 

their  connection  with  the  company,  it  is  reasonable  to  infer 
that  the  secret  lay  to  a  large  extent  in  the  remarkable  person- 
ality and  business  methods  of  the  young  Scotsman  who  "  drove 
the  band-wagon." 


THE   FAMOUS   LUCY   FURNACES 

The  prosperity  and  fame  of  the  Carnegie  company  did  not 
begin  until  1874.  Before  that,  there  had  been  nine  years 
of  struggle  for  lack  of  capital  and  equipment.  In  1873  two 
new  furnaces  had  been  built,  now  famous  in  the  iron  world 
as  the  Lucy  and  the  Isabella.  The  Lucy  belonged  to  the 
Carnegie  company,  and  the  Isabella  to  a  combine  of  Pitts- 
burgh iron  men.  These  furnaces  were  of  equal  size,  and 
belonged  to  rival  owners.  They  began  at  once  to  race  in 
the  production  of  iron,  and  their  amazing  achievements  for 
the  first  time  attracted  the  attention  of  all  countries  to  Pitts- 
burgh. 

The  average  output  of  a  furnace  was  then  fifty  tons  a 
day.  There  were  wild  hurrahs  at  the  Carnegie  company's 
works  in  1874,  when,  for  the  first  time  in  the  history  of  iron- 
making,  the  Lucy  turned  out  a  hundred  tons  of  iron  in  one 
day.  In  England  the  news  was  received  in  silent  incredulity. 
To  believe  that  a  single  furnace  could  pour  out  twenty-two 
thousand  dollars'  worth  of  iron  in  a  week  was  too  much. 
Where  was  Pittsburgh,  anyhow?  And  who  was  this  Carnegie 
who  made  such  preposterous  claims?  No  industrial  "Who's 
Who "  mentioned  the  name  of  this  boaster  from  the  wild 
West.  It  was  of  course  a  newspaper  myth,  concocted  by  the 
sea-serpent  editor.  So  said  the  iron-makers  of  Europe,  until 
some  of  them  visited  Pittsburgh  and  saw  for  themselves  the 
river  of  molten  iron  flowing  wide  and  deep. 

A  second  Lucy  furnace  was  built  in  1877,  and  the  Carnegie 
company  operated  both  until  the  organisation  of  the  Steel 

88 


THE   RISE  OF   ANDREW  CARNEGIE 

Trust.  During  that  period  of  nearly  thirty  years  they  pro- 
duced more  than  three  million  tons  of  iron — enough  to  give 
four  pounds  apiece  to  every  man,  woman,  and  child  on  the 
globe;  enough  to  pave  a  road  seventy  feet  wide  with  iron 
plates  an  inch  thick  from  New  York  to  St.  Louis.  The  Car- 
negie company  received  for  this  enormous  output  about  fifty- 
seven  million  dollars,  probably  one-fifth  of  it  being  clear 
profit. 

One  of  the  original  employees  at  the  Lucy  is  still  at  work 
there.  He  entered  the  service  as  a  mechanic,  and  has  now 
been  captain  of  the  furnaces  for  many  years.  "  Dean  of  the 
blast  furnace  corps  of  the  world,"  Mr.  Carnegie  calls  him. 
"  None  of  the  partners,"  he  adds,  "  is  dearer  to  his  fellows  and 
his  old  chief  than  Jim  Scott." 

There  is  nothing  idyllic  about  the  Lucy  furnaces.  They 
have  received  no  honours,  no  medals,  no  monuments.  They 
have  inspired  neither  artist  nor  poet.  Yet  for  thirty-three 
years,  for  every  hour  of  the  day  and  night,  they  have  been 
untiringly  making  the  useless  into  the  useful,  magically  trans- 
forming the  ore  into  a  ceaseless  stream  of  that  metal  which 
is  immeasurably  more  precious  to  civilisation  than  all  the 
gold  and  silver  and  rubies  and  diamonds.  Here  was  the 
dream  of  the  pioneer  iron-makers  come  true.  It  was  for 
this  that  daring  John  Berkeley  gave  his  life  in  Virginia  cen- 
turies before — that  obstinate  Thomas  Dexter  battled  with  the 
Puritans — that  Baron  Stiegel  sacrificed  his  native  land.  The 
Lucy  furnaces  represent  the  very  utmost  that  the  human  race 
can  do  in  the  iron-making  craft — the  sum  total  of  centuries 
and  centuries  of  gradual  improvements.  When  the  eyes  of  the 
American  people  are  lifted  from  the  kindergarten  romances 
of  myth  and  fiction  to  the  grandly  moving  epics  of  industry 
that  give  distinctive  value  to  the  history  of  our  republic,  their 
story  will  become  a  national  heritage. 

89 


THE  ROMANCE  OF  STEEL 

A    GOLDEN    FLOOD    OF    PROFITS 

With  H.  M.  Curry,  who  was  in  charge  of  the  Lucy  fur- 
naces, breaking  the  world's  record  in  the  production  of  pig 
iron,  and  Captain  "  Bill "  Jones  doing  even  more  wonderful 
things  at  the  Edgar  Thomson  Steel  Works,  the  Carnegie  com- 
pany began  to  take  shape  as  the  most  effective  millionaire- 
making  machine  the  world  has  ever  seen. 

"We  shall  make  forty  per  cent,  next  year,"  cried  Carnegie 
in  1876. 

His  partners  smiled  but  shook  their  heads.  When  the  next 
year  was  ended,  and  the  last  dollar  counted,  they  found  that 
their  clear  profit  was  nearly  forty-two  per  cent.,  which  was 
paid  to  them  partly  in  stock  and  partly  in  cash.  When 
the  good  news  was  announced,  Carnegie  made  a  second 
prophecy. 

"  Next  year  we  shall  beat  down  the  cost  of  steel  rails  to 
thirty-eight  dollars,"  he  said;  "and  we  shall  get  forty-two 
dollars  and  fifty  cents  a  ton  for  them." 

This  prophecy  was  fulfilled  with  an  almost  uncanny  pre- 
cision. The  cost  of  the  rails  was  reduced  below  thirty-eight 
dollars,  and  the  average  price  received  was  exactly  forty-two 
dollars  and  a  half.  In  one  month  they  netted  on  rails  alone 
over  fifty-two  thousand  dollars — more  than  Andrew  Car- 
negie's father  could  have  saved  in  two  hundred  and  sixty 
years. 

As  Carnegie  conducted  his  business  affairs  from  all  parts 
of  the  world,  he  happened  to  be  setting  out  for  a  climb  of 
Mount  Vesuvius  when  he  heard  that  his  second  guess  had 
come  true. 

"Tell  Captain  Jones,"  he  writes,  "that  there  was  a  proud 
little  stout  man  who  gave  a  wild  hurrah  when  he  saw  that 
the  Edgar  Thomson  Works  were  ahead.  It  was  a  close  race 
with  the  Cambria  Iron  Company,  but  they  had  a  start. 
Besides,  we  had  to  go  through  the  measles,  you  know." 

90 


JAMES    SCOTT 


THE   RISE  OF   ANDREW  CARNEGIE 

Although  the  stock  was  being  steadily  increased,  the  com- 
pany's earnings  in  that  year  were  thirty-one  per  cent.  It  was 
always  the  rule,  however,  to  declare  small  dividends;  the 
partners  were  agreed  in  the  policy  of  keeping  most  of  their 
profits  for  the  improvement  and  extension  of  their  works. 
They  were  now  making  one-seventh  of  all  the  Bessemer  steel 
in  the  United  States,  although  ten  companies  had  started 
before  them.  Their  competitors  were  also  prospering,  but 
not  to  such  an  extent  as  Carnegie  and  his  partners.  In  1880 
the  price  of  rails  suddenly  soared  to  eighty-five  dollars  a  ton, 
while  Captain  Jones  was  turning  out  ten  thousand  tons  a 
month  at  a  cost  of  about  thirty-six  dollars.  This  war  price 
did  not  continue,  but  while  it  lasted  the  profits  were  ten  thou- 
sand dollars  a  day  on  the  one  item  of  rails.  Again  the  steel 
mill  made  over  forty  per  cent,  and  piled  more  than  half  a 
million  dollars  into  their  bulging  treasury. 

"  Surely  this  cannot  last,"  said  several  of  the  amazed 
partners. 

"  It  is  only  the  beginning!"  shouted  Carnegie,  as  he  goaded 
the  heads  of  all  departments  into  a  still  more  frenzied  race 
for  dividends. 

The  golden  flood  rose  like  a  mountain  river  after  a  cloud- 
burst. The  sudden  pressure  of  business  taxed  the  Carnegie 
company  to  the  point  of  explosion,  and  drove  the  rank  and 
file  to  desperation  with  overwork.  Night  was  henceforth 
abolished.  Even  twenty-four  hours  a  day  were  found  to  be 
too  few.  If  the  securing  of  a  fifty-hour  day  had  been  a  task 
within  human  power,  Andrew  Carnegie  would  have  suc- 
ceeded in  obtaining  it.  He  had  orders  for  eighty  thousand 
tons  of  rails,  and  on  every  ton  there  was  from  forty  to  fifty 
dollars'  profit.  In  eight  months  the  steel  plant  had  cleared  a 
sum  equal  to  its  original  cost.  In  twelve  months,  almost 
doubting  their  eyes,  the  partners  figured  out  a  gain  of 
$1,625,000  from  the  steel  works  and  $446,600  from  the  fur- 
naces and  iron-mill — a  total  of  $2,071,600. 

91 


THE   ROMANCE   OF   STEEL 

By  this  time  there  were  only  seven  partners.  Four  had 
died  or  been  bought  out.  If,  therefore,  their  year's  profits 
had  been  in  gold,  they  would  have  had  a  treasure  so  heavy 
that  they  could  not  have  moved  it  an  inch.  Six  thousand 
pounds  of  pure  gold,  with  an  extra  three-hundredweight 
thrown  in  for  good  measure!  It  was  greater  than  the  ransom 
of  an  Indian  rajah,  yet  it  was  no  more  than  the  profits  of 
one  year's  work  for  a  half  dozen  American  citizens,  every 
one  of  whom  had  begun  life  in  a  workman's  cottage.  This 
was  the  dawn  of  the  golden  age.  This  was  triumphant 
democracy. 

Best  of  all,  every  dollar  of  it  was  clean  money.    It  was  not 

gained  by  a  throw  of  the  Wall  Street  dice  or  a  speculation 

which  scattered  the  seeds  of  future  bankruptcies.     For  every 

j  I  pound  of  gold  they  had  given  eleven  thousand  pounds  of  good 

I  steel.    Every  steel  billet,  every  ton  of  rails,  meant  more  traffic, 

more  business,  more  employment,  more  civilisation. 

It  is  true  that  at  the  time  prices  were  artificially  raised, 
both  by  an  agreement  among  the  steel  men  and  by  the  high 
tariff  which  obliging  statesmen  had  established.  The  rail- 
roads were  caught  between  two  millstones — the  pool  above 
and  the  tariff  below.  But  the  competition  among  rival  rail- 
road companies  compelled  them  to  build  more  lines  and  to 
re-rail  old  ones.  Iron  rails  were  sold  for  junk,  and  steel 
rails  laid  in  their  place.  This  outlay  stimulated  all  branches 
of  trade,  and  the  increased  freight  and  passenger  traffic  went 
beyond  the  expectations  of  the  railroad  men,  bringing  pros- 
perity to  all  concerned. 

A    RACE    FOR    SUPREMACY    IN    STEEL 

America  and  Great  Britain  were  now  running  neck  and  neck 
in  the  making  of  cheap  steel,  but  the  latter  still  had  many  ad- 
vantages. Labour  was  cheaper;  raw  materials  were  cheaper; 

92 


THE   RISE   OF   ANDREW   CARNEGIE 

and  more  capital  was  invested.  Not  even  a  tariff  wall  of 
twenty-eight  dollars  a  ton  could  prevent  the  English  steel- 
makers from  selling  two  hundred  million  dollars'  worth  of 
steel  to  American  customers  in  three  years.  To  see  this  enor- 
mous amount  of  American  gold  paid  to  the  capitalists  of 
Newcastle  and  Sheffield  spurred  on  the  steel-makers  of  Pitts- 
burgh to  quicken  their  pace.  Who  could  be  satisfied  with  a 
few  dozen  millions  when  there  were  hundreds  in  sight? 

"Faster!  Faster!"  cried  Carnegie  to  his  men,  coaxing 
them  with  presents  and  whipping  them  with  censorious  sug- 
gestions. 

Andrew  Carnegie  had  increased  his  holdings  from  one- 
third  to  more  than  one-half  of  the  entire  concern.  In  1881 
he  found  himself,  after  only  six  years  of  steel-making,  the 
foremost  American  in  the  business.  His  capital  had  increased 
twelvefold  in  six  years.  His  quarter  of  a  million  had  become 
nearly  three  millions.  Captain  Jones  had  placed  the  crown 
of  the  empire  of  steel  upon  his  head.  During  those  six  years 
he  had  not  only  climbed  from  nothing  to  an  emperorship; 
he  had  sauntered  through  Great  Britain  on  several  pleasure 
trips;  jogged  leisurely  around  the  globe,  spending  much  time 
in  India  and  Japan;  and  written  his  first  book,  "Round  the 
World."  Seldom  has  international  prominence  been  attained 
with  so  little  exertion. 

It  is  safe  to  say  that  Andrew  Carnegie  invested  less  money 
and  gave  less  time  to  his  business,  and  made  more  money 
out  of  it,  than  any  other  self-made  millionaire  in  the  world. 
He  found  a  "  royal  road  "  to  wealth — or,  rather,  made  one 
for  himself.  Through  his  shrewd  foresight  and  a  remarkable 
combination  of  circumstances,  the  rising  tide  of  molten  steel 
was  "  taken  at  the  flood  "  in  such  a  way  that  it  swept  him  on 
to  a  position  of  power  and  influence  greater  in  its  scope  than 
that  possessed  by  most  European  monarchs. 

In  1 88 1  the  partners  reorganised  under  the  name  of  Car- 

93 


THE   ROMANCE   OF  STEEL 

negie  Brothers  &  Company,  with  a  capital  of  five  million 
dollars.    Their  individual  holdings  were  as  follows: 

Andrew  Carnegie    $2,737,977.95 

Thomas  M.  Carnegie 878,096.58 

Henry  Phipps 878,096.58 

David  A.  Stewart 175,318.78 

John  Scott 175,318.78 

Gardiner  McCandless 105,191.33 

John  W.  Vandervort   50,000.00 

The  above  stock-list  shows  that  in  the  Carnegie  company 
every  item,  however  large,  was  figured  out  to  the  last  cent. 
The  partners  had  not  allowed  their  waggon-loads  of  gold  to 
make  them  forget  the  silver  and  the  nickel,  or  even  the  copper 
bawbees. 

From  1880  onwards,  the  company  never  cleared  less  than  a 
million  a  year.  Its  inside  financial  history  was  then  unknown 
to  the  public.  If  the  partners  had  not  quarrelled  and  become 
carelessly  talkative  in  their  wrath,  this  story  of  their  millions 
might  never  have  been  told.  Thanks  to  their  wrangling  we 
know  the  yearly  profits  to  a  cent.  Here,  for  instance,  are 
their  winnings  in  the  game  from  1880  until  the  advent  of 
Henry  Clay  Frick: 

YEAR  PROFITS  PERCENTAGE 

1881 $2,000,377.42 40 

l882 2,128,422.91 42 

1883 1,019,233.04 20 

1884 1,301,180.28 26 

1885 1,191,993.54 24 

1886 2,925,350.08 59 

1887 3,441,887.29 69 

1888 1,941,555.44 39 

These  figures  are  quoted  from  a  volume  entitled  "The 
Inside  History  of  the  Carnegie  Steel  Company,"  by  J.  H. 
Bridge — a  book  which  is  reliable  so  far  as  most  of  its  statis- 

94 


THE   RISE   OF   ANDREW   CARNEGIE 

ties  are   concerned,   though  wholly   one-sided   in   its   infer- 
ences. 

Roughly  speaking,  this  was  a  total  profit  of  sixteen  millions 
in  eight  years,  on  an  original  investment  of  five  millions — an 
average  of  forty  per  cent,  a  year.  And  the  bulk  of  the  money 
went  to  Andrew  Carnegie,  as  the  number  of  the  partners  dwin- 
dled from  seven  to  four.  Mr.  Carnegie's  personal  wealth  at 
this  time  was  about  fifteen  million  dollars.  His  quarter  mil- 
lion of  brokerage  money  had  earned  him  a  million  dollars  a 
year  since  he  had  invested  it  in  1873.  It  had  multiplied  itself 
sixty  times  over. 

THE   FATE  OF  CARNEGIE'S   PARTNERS 

Previous  to  the  incoming  of  Mr.  Frick — which,  as  we  shall 
see,  marks  the  beginning  of  a  new  period  in  the  steel  business 
—Mr.  Carnegie  had  worked  with  thirteen  partners.  It  was 
an  unlucky  number,  so  Pittsburgh  people  say,  for  the  part- 
ners. Finally  but  one  of  the  thirteen  survived — Henry 
Phipps.  Some  were  dropped;  some  begged  to  be  let  go; 
and  some  were  plucked  from  the  narrowing  circle  by  death. 
Like  the  "  ten  little  niggers "  who  were  so  strangely  cut  off 
one  by  one,  the  members  of  the  firm  decreased  with  fatal 
regularity  until  none  remained  except  "  Andy"  and  "  Harry," 
the  son  of  the  weaver  and  the  son  of  the  cobbler,  neighbours  in 
Barefoot  Square,  Slabtown,  Allegheny  City,  a  short  thirty 
years  before. 

The  order  in  which  the  partners  dropped  out  was  as 
follows : 

THOMAS  N.  MILLER,  1867— To  Thomas  N.  Miller, 
Andrew  Carnegie  owes  his  start  in  the  iron  business.  He  was 
the  Allegheny  City  playmate  of  both  Phipps  and  Carnegie, 
and  developed  into  a  man  of  high  character  and  kindly  dispo- 
sition. Although  he  and  Mr.  Carnegie  have  had  several 
small  disputes  concerning  business  transactions,  they  have 

95 


THE   ROMANCE   OF   STEEL 

remained  fast  friends.  Every  year  the  two  meet  to  talk  over 
old  times.  Miller  is  to-day  enjoying  an  old  age  of  quietness 
and  good  health,  living  in  a  modest  brick  residence  in  Pitts- 
burgh. His  memory  is  unclouded,  and  many  of  the  personal 
anecdotes  in  this  history  were  related  by  him  to  the  writer. 

He  has  a  vivid  recollection  of  the  moneyless  condition  in 
which  he  and  the  Carnegie  brothers  found  themselves,  as 
boys  and  young  men.  Long  after  they  were  rich  in  stock, 
they  were  still  poor  in  ready  cash.  On  one  occasion,  he  says, 
when  Andrew  Carnegie  was  twenty-seven  years  old,  he  and 
Miller  and  Vandervort  spent  the  summer  tramping  through 
England  and  Scotland.  When  they  returned  to  New  York, 
and  had  engaged  one  of  the  cheapest  rooms  in  French's  Hotel, 
Miller  said: 

"  Let's  count  our  money,  boys,  and  see  if  we  have  enough  to 
take  us  home  by  way  of  Niagara  Falls." 

They  spread  their  money  on  the  bed,  and  found  that  they 
could  just  afford  the  extra  expense.  "Agreed!"  said  Car- 
negie, and  so  in  1862  they  had  their  first  view  of  the  majestic 
Niagara. 

Carnegie  himself  tells  a  story  about  Vandervort  in  con- 
nection with  this  trip.  His  own  income  at  that  time,  he  says, 
was  about  fifteen  hundred  dollars  a  year,  while  Vandervort 
was  a  poor  student,  living  almost  from  hand  to  mouth.  Van- 
dervort, therefore,  regarded  Carnegie  as  already  a  gentleman 
of  fortune. 

"  Great  Caesar,  boys!"  he  would  say,  thumping  the  table 
until  the  beer  spilled,  "  if  I  ever  get  fifteen  hundred  dollars 
a  year  income,  catch  me  working  like  a  slave,  as  Carnegie  and 
Phipps  do!" 

Not  long  afterward,  Vandervort  had  thousands  a  month; 
but,  says  Carnegie,  "  Vandy  worked  harder  than  ever." 

Miller  was  not  forced  out  by  Carnegie,  as  has  been  some- 
times charged.  On  the  contrary,  he  urged  Carnegie  to  relieve 
him  of  his  share  in  the  company.  He  had  two  reasons  for 

96 


WILLIAM    P.    SHINN 


THE   RISE   OF   ANDREW   CARNEGIE 

quitting.  First,  he  had  quarrelled  with  Phipps,  and  accused 
him  of  speculating  in  oil  with  the  money  of  the  firm;  and 
second,  the  iron  business  had  paid  practically  no  dividends 
for  three  years.  As  has  already  been  stated,  Carnegie  paid 
him  seventy-three  thousand  six  hundred  dollars  for  his  inter- 
est, and  Miller  flattered  himself  that  he  had  got  rid  of  an 
unpleasant  partnership  and  an  enterprise  that  was  doomed 
to  failure.  Shortly  before  this,  Carnegie  had  sold  him,  for 
six  hundred  and  thirty-eight  dollars,  a  share  in  an  oil  prop- 
erty which  netted  him  a  clear  profit  of  seventy-two  thou- 
sand, so  that  Miller  was  not  financially  a  loser  because  of 
his  friendship  with  the  future  steel  king. 

WILLIAM  COLEMAN,  1876 — The  deal  by  which  Carnegie 
obtained  possession  of  Coleman's  share  seems  hard  to  under- 
stand. Coleman  was  a  shrewd,  experienced  man  of  business. 
He  was  among  the  first  to  appreciate  the  possibilities  of  the 
Bessemer  steel  process.  He  was  wealthy,  and  not  obliged 
to  part  with  his  property  unless  he  freely  chose  to  do  so. 
Yet  he  sold  his  hundred  thousand  dollars'  worth  of  stock  at 
par,  payable  in  five  years,  with  interest  at  six  per  cent.,  in  a 
year  when  the  business  made  forty-two  per  cent,  of  clear  profit. 

Coleman  took  his  money  and  stepped  out  gladly.  He  did 
not  approve  of  Shinn  as  a  manager.  Carnegie  did.  Instead 
of  being  forced  out,  the  fact  is  that  Coleman  insisted  upon 
Carnegie  buying  his  share  of  the  business. 

ANDREW  KLOMAN,  1877 — The  charge  has  often  been 
made,  by  those  who  have  no  more  than  a  superficial  or 
biassed  knowledge  of  the  history  of  steel,  that  the  real  founder 
of  the  Carnegie  company  was  Andrew  Kloman,  and  that  he 
was  wrongfully  ejected  from  it  when  the  days  of  its  pros- 
perity began.  This  is  not  true.  The  fact  is  that  Kloman 
came  within  an  ace  of  bringing  utter  ruin  upon  the  whole 
enterprise.  He  was  the  shirt-sleeves  partner,  and  therefore 
received  more  credit  than  the  others  for  being  the  real 
worker  of  the  firm.  In  the  iron-mill  he  was  a  genius;  in 

97 


THE   ROMANCE   OF   STEEL 


the  office  he  was  a  child.  Iron  was  his  metal,  not  gold.  All 
large  business  transactions  confused  him  and  made  him  sus- 
picious. He  was  very  watchful  in  the  protection  of  his  rights, 
and  anxious  to  make  money,  but  not  qualified  to  cope  with 
the  wily  manipulators  of  the  commercial  world. 

About  1871  he  was  enticed  into  a  wild-cat  mining  scheme, 
unknown  to  his  partners.  Two  years  later,  when  the  Jay 
Cooke  smash  hurled  so  many  firms  into  bankruptcy,  Klo- 
man's  mining  company  went  down.  He  fell  with  it,  as  it 
was  not  a  limited  liability  company,  and  in  falling  nearly 
dragged  down  the  whole  Carnegie  group. 

"Make  an  assignment  at  once,"  said  Andrew  Carnegie; 
"  and  when  the  storm  blows  over  we'll  restore  you  to  full 
partnership." 

Kloman  did  so,  squaring  with  his  creditors  for  fifty  cents 
on  the  dollar.  During  this  entanglement  Carnegie  paid  him 
a  salary  of  five  thousand  dollars  a  year,  and  then  offered  him 
a  hundred-thousand-dollar  interest  in  the  company,  to  be 
paid  for  out  of  the  profits.  Kloman  angrily  refused  this 
offer  and  determined  to  create  a  new  works,  of  which  he 
alone  would  be  the  master.  He  had  no  doubts  of  his  success 
in  the  new  enterprise;  but  in  a  few  years  he  discovered  his 
mistake. 

If  this  were  a  treatise  on  practical  iron-making,  it  would 
give  a  foremost  place  to  Andrew  Kloman;  but  as  it  is  not, 
as  it  is  mainly  a  story  of  money-makers,  he  must  necessarily 
be  painted  in  the  background  only,  and  merged  in  the  dim 
colouring  of  failure.  In  his  after  life  he  was  unsuccessful  in 
business,  and  until  the  day  of  his  death  he  believed  himself 
to  be  a  deeply  wronged  man.  On  this  point  there  will  con- 
tinue to  be  difference  of  opinion. 

"  Andrew  Carnegie  treated  Kloman  not  only  with  fairness, 
but  with  generosity,"  says  Thomas  N.  Miller. 

J.  EDGAR  THOMSON,  1874 — Mr.  Thomson,  who  died  in 

98 


THE   RISE   OF   ANDREW   CARNEGIE 

this  year,  was  the  patron  saint  of  the  Carnegie  company.  He 
gave  it  money,  and  the  prestige  of  his  name,  which  was  more 
than  money.  He  bought  its  rails  and  he  pared  down  its 
freight  bills.  At  the  time  when  its  young  partners  were 
being  called  flighty  and  reckless,  he  patted  them  on  the  back 
and  declared  his  confidence  in  their  ability.  As  he  cared 
for  no  business  interests  outside  of  railroading,  he  was  not 
anxious  to  be  an  active  partner.  He  had  bought  a  hundred 
thousand  dollars'  worth  of  the  Carnegie  company's  bonds 
in  1873,  and  his  executors  were  paid  in  full  when  the  bonds 
matured. 

COLONEL  THOMAS  A.  SCOTT,  1877 — Colonel  Scott  was 
patron  saint  number  two.  Through  his  favour  Andrew  Car- 
negie had  made  his  first  large  sum  of  money  in  the  quickest 
and  easiest  way  imaginable ;  and  Scott  had  put  twenty  thou- 
sand dollars  into  the  partners'  young  steel  enterprise.  For 
financial  and  for  romantic  reasons,  Scott  and  Carnegie 
differed,  after  a  friendship  of  more  than  twenty  years.  Both 
incidents  are  highly  interesting,  and  it  is  strange  that  they 
have  not  found  their  way  into  print. 

The  financial  reason  of  the  quarrel — the  lesser  of  the  two 
causes — was  as  follows:  Colonel  Scott  had  launched  out 
into  a  daring  scheme  for  spanning  Texas  with  a  railroad, 
and  acquiring  thereby  great  tracts  of  land.  He  asked  Car- 
negie to  indorse  his  paper,  and  to  run  equal  risks  in  the 
venture.  Carnegie  refused. 

"  I  will  either  lend  or  give  you  three  hundred  thousand 
dollars,"  he  said;  "but  I  am  not  in  a  position  to  stand  behind 
the  whole  enterprise." 

Finally,  Carnegie  put  a  quarter  of  a  million  dollars  into 
the  Texas  scheme,  not  because  he  expected  profits,  but  to 
help  Scott. 

The  romantic  cause  of  the  quarrel  was  no  less  than  this — 
that  Scott  stole  away  Carnegie's  sweetheart.  Andrew  Car- 

99 


THE   ROMANCE   OF   STEEL 

negie  was  very  gallant  in  his  twenties  and  thirties.  Rumour 
connected  his  name  with  those  of  many  women;  but  there 
was  one  for  whom  his  regard  was  more  than  a  preference. 
Miss  Riddle,  daughter  of  a  Pittsburgh  editor,  fascinated  the 
impressionable  young  Scotsman  with  her  quick  wit  and  her 
charm  of  face  and  manner. 

"  I'd  like  to  have  Colonel  Scott's  opinion  of  Annie  Riddle," 
said  Carnegie  one  day  to  his  friend  Miller. 

"  Be  careful,  Andy,"  warned  Miller.  "  Scott's  a  hand- 
some man,  and  you're  not.  If  he  sees  Annie,  he'll  win  her 
away  from  you." 

"Well,  if  any  other  man  can  win  Annie  Riddle  away  from 
me,  he's  welcome  to  her,"  said  Carnegie  sturdily. 

The  following  Sunday  he  introduced  Scott  to  Miss  Riddle, 
and  in  a  few  weeks  it  became  apparent  that  Miller's  prophecy 
would  come  true.  In  six  months  Miss  Riddle  became  Mrs. 
Scott,  and  Carnegie  was  "  left  lamenting."  In  this  way  does 
love  play  havoc  with  the  great  affairs  of  the  commercial 
world.  When  I  mentioned  this  incident  to  Mr.  Carnegie, 
he  laughed  and  said  that  he  certainly  had  been  responsible 
for  introducing  his  two  friends,  but  that  he  had  intended 
the  introduction  to  result  as  it  did. 

"  I  wasn't  thinking  of  marrying  then,"  said  he. 

DAVID  McCANDLESS,  1879 — Mr.  McCandless,  who  died 
in  this  year,  had  done  much  to  establish  the  Carnegie  enter- 
prise. Many  a  time  the  use  of  his  name  loosened  the  purse- 
strings  of  reluctant  bankers.  He  had  been  one  of  the  fore- 
most citizens  of  Pittsburgh  while  "Andy,"  "Tom,"  and 
"Harry"  were  messenger  boys  earning  half  a  dollar  a  day. 
He  was  a  man  who  won  not  only  the  esteem,  but  also  the 
affection  of  all  his  associates. 

"  To  the  day  I  die  I  know  I  shall  never  be  able  to  think 
of  him  without  a  stinging  pain  at  the  heart,"  wrote  Andrew 
Carnegie  from  India,  when  he  heard  of  his  partner's  death. 

100 


THE   RISE   OF   ANDREW  CARNEGIE 

Ninety  thousand  dollars  was  paid  to  his  widow,  which  was 
her  legal  share  in  the  company. 

WILLIAM  P.  SHINN,  1881— Mr.  Shinn  had  been  manager 
of  the  steel-making  end  of  the  business  for  the  first  six  years. 
He  introduced  improvements,  one  of  them  saving  forty  thou- 
sand dollars  a  year  to  the  company.  Personally,  he  was  not 
popular  with  the  partners,  and  as  the  culmination  of  a  long 
series  of  disagreements  he  sent  in  his  resignation.  It  was 
accepted,  and  the  par  value  of  his  stock  was  ofered  iiiifc: 
Shinn  was  more  combative  than  those  who  ha,d  gone  put  of 
the  company  before  him,  and  at  once  brought  suh'to  riecoVJeir 
the  full  market  value  of  his  holdings.  A  bitter  and  abusive 
wrangle  followed.  The  company  refused  to  produce  its 
books,  and  consented  to  arbitrate.  The  verdict  was  not  then 
made  public,  but  it  is  now  known  that  Shinn  received  the 
face  value  of  his  stock  and  nearly  two  hundred  thousand 
dollars  besides. 

JOHN  SCOTT,  1882 — Scott,  who  had  been  let  in  because 
he  was  a  railway  director,  became  involved  in  speculation. 
He  begged  Carnegie  to  save  him  from  bankruptcy  by  buying 
his  stock  and  got  its  face  value.  In  after  years  Scott  declared 
that  Carnegie  was  the  best  friend  he  ever  had. 

GARDINER  MCCANDLESS,  1882— This  young  man  was  a 
son  of  David  McCandless.  He  had  inherited  twenty  thou- 
sand dollars'  worth  of  bonds.  After  remaining  in  the  firm 
for  five  years,  he  was  persuaded  that  thousands  in  the  hand 
were  worth  millions  in  the  future,  and  thus  he  merely  flits 
in  and  out  of  this  history. 

THOMAS  M.  CARNEGIE,  1886— The  genial  "Tom"  Car- 
negie, everybody's  friend,  died  in  1886,  in  his  forty-fourth 
year.  The  exact  amount  received  by  his  wife  has  never  been 
made  public,  but  it  is  generally  supposed  to  have  been  ample. 

DAVID  A.  STEWART,  1889— Mr.  Stewart  had  entered  the 
firm  as  the  bosom  friend  of  Thomas  Carnegie  and  as  the 

101 


THE   ROMANCE   OF   STEEL 

president  of  the  Pittsburgh  Locomotive  Works.  He  was  a 
quiet,  unassuming  man,  who  held  up  his  share  of  the  struc- 
ture. When  he  died  in  1889,  his  stock  was  promptly  bought 
in  from  his  heirs  by  the  Carnegie  Company. 

JOHN  W.  VANDERVORT,  1897 — Vandervort  was  a  personal 
friend  and  travelling  companion  of  Andrew  Carnegie.  He 
had  a  comparatively  small  interest,  but  enough  to  make  him, 
at  the  time  of  his  death,  one  of  the  thousand  millionaires  of 
steel.  '  '  , 

'  And  so  Andrew  Carnegie  and  Henry  Phipps  were  the 
only  two  of  the  fourteen  who  survived.  Phipps  remained  in 
the  firm  with  patient  pertinacity  and  devotion  to  its  interests. 
Carnegie  remained  because  of  his  aggressive  ambition  to 
dominate  the  international  world  of  steel.  It  is  incorrect 
to  assert  that  the  other  partners  were  ejected.  None  were 
coerced  or  voted  out.  Even  when  the  era  of  big  dividends 
began,  there  were  many  business  men  in  Pittsburgh  who 
prophesied  that  the  high-flying  Carnegie  and  his  unfortunate 
partners  would  come  to  grief.  The  iron  and  steel  business 
had  always  been  erratic — a  business  of  princes  and  paupers; 
and  the  outgoing  partners  believed  that  the  tide  which  was 
rushing  them  to  prosperity  would  soon  exhaust  itself  and 
swing  backward. 

THE   EMPEROR   OF   STEEL 

Andrew  Carnegie,  on  the  other  hand,  was  not  a  quitter. 
Nothing  could  erase  the  imprint  which  his  first  sight  of  a 
Bessemer  converter  had  made  upon  his  mind.  He  bought 
stock  steadily,  in  good  times  and  in  bad  times.  He  was  no 
hair-trigger  speculator,  snapped  by  every  touch  of  rumour. 
The  first  of  business  maxims  is  "  Buy  cheap,"  and  he  never 
disobeyed  it  voluntarily.  He  knew  how  to  prepare  the 
market,  how  to  make  suggestions,  how  to  manage  men, 
how  to  give  information  or  withhold  it.  When  new  stock 

102 


THE    RISE    OF   ANDREW    CARNEGIE 

was  issued  he  captured  the  lion's  share  of  it,  getting  it  on 
credit  whenever  possible.  Personally,  he  was  a  man  of  the 
simplest  tastes,  having  no  expensive  habit  except  that  of 
travelling.  He  was  unmarried.  All  his  attention  was  con- 
centrated upon  the  guidance  of  his  money-making  machinery. 

From  letters  of  his  which  have  been  made  public  it  is  very 
clear  that  as  profits  increased  he  was  anxious  that  partners 
should  decrease.  His  hope  was  to  make  the  concern  a  "  close 
corporation."  A  dozen  partners  meant  a  dozen  shares  and 
a  dozen  opinions.  It  meant  also,  in  the  Carnegie  company, 
a  series  of  disputes  and  several  bitter  quarrels.  As  a  democ- 
racy the  company  was  not  satisfactory,  to  say  the  least. 
Inevitably  it  moved  toward  absolutism.  The  little  republic 
evolved  into  an  empire. 

Henceforth  the  iron-makers  and  steel-makers  of  America 
were  not  to  be  a  self-governing  peasantry  of  small  capitalists. 
The  word  "  thousands "  was  erased,  and  "  millions "  was 
written  in  its  place.  Power  slipped  from  the  many  to  the 
few.  The  steel  business  became  once  more  an  exclusive  guild, 
which  no  mere  commoner  could  enter.  A  feudalism  of 
barons  divided  the  country  into  industrial  provinces.  And 
above  them,  on  an  eminence  which  became  more  and  more 
like  a  throne,  appeared  the  sturdy  figure  of  the  little  Scots- 
man— five  and  a  third  feet  high  and  as  heavy  as  four  feet  of 
steel  rail. 

Andrew  Carnegie,  the  Allegheny  City  bobbin-boy,  had 
become  the  Caesar  of  steel. 


103 


CHAPTER  IV 
THE  CARNEGIE  COMPANY  UNDER  FRICK 

The  Rise  of  Henry  Clay  Frick,  Who  Was  for  Years  the  Active  Head  of  the 
Carnegie  Company — His  Mastery  of  the  Coke  Business  and  His  Feats 
of  Financiering — How  He  Fought  the  Battle  of  Homestead  and  Ushered 
in  the  Era  of  Machinery — The  Dramatic  Story  of  Henry  W.  Oliver, 
and  an  Inside  View  of  the  Workings  of  the  Famous  "  Carnegie  System." 

THE  year  before  Andrew  Carnegie  entered  the  iron 
business,  a  shy  fourteen-year-old  boy  got  his  first  job 
as  errand-boy  in  a  village  store  at  Mount  Pleasant, 
forty  miles  from  Pittsburgh.  It  was  the  year  in  which  Vicks- 
burg  surrended  to  General  Grant,  a  time  of  tremendous  ex- 
citement and  anxiety.  There  were  not  as  many  people  in 
Mount  Pleasant  as  there  are  to-day  in  the  Frick  Building, 
Pittsburgh ;  but  it  seemed  like  a  populous  place  to  the  boy  who 
had  been  brought  up  on  a  lonely  little  farm  half  a  mile  from 
the  nearest  neighbour.  His  parents  were  quiet,  plodding 
Swiss-Germans,  who  made  the  least  possible  amount  of 
money  by  doing  the  greatest  possible  amount  of  work.  In 
the  winters  he  had  learned  to  read  and  write  at  the  school- 
house.  In  the  summers  he  had  carried  buttermilk  to  the 
pigs  and  oatmeal-water  to  his  father.  He  seemed  in  every 
way  an  ordinary,  barefooted  little  youngster,  with  nothing 
in  his  favour  except  that  he  had  been  born  in  the  United 
States. 

The  boy's  name  was  Henry  Clay  Frick. 

There  is  a  little  village  called  Frick  in  the  Swiss  canton 
of  Aargau,  not  far  from  Basle;  and  a  century  and  a  half  ago 
several  families  left  the  village  and  settled  in  Pennsylvania. 

104 


^    OF  THE 

UNIVERS1T 


» * 


HENRY    CLAY    FRICK,    AS    A    YOUNG   MAN 


CARNEGIE   COMPANY   UNDER    PRICK 

Their  descendants  were  plain,  inconspicuous  people.  One 
of  the  boy's  grandfathers  made  horseshoes  and  the  other  made 
whiskey.  The  boy  was  not  fond  of  mischief,  like  Bill  Jones, 
nor  a  student,  like  Andy  Carnegie.  He  was  serious,  self- 
contained,  and  more  dignified  than  most  boys.  He  had  few 
of  the  privileges  of  childhood,  for  the  few  dollars  he  earned 
were  spent  for  his  board  and  clothes.  At  eighteen  he  had 
become  a  man. 

"Away  back  in  1867,"  said  an  old  Pittsburgh  iron-maker, 
"  I  was  tramping  through  western  Pennsylvania,  looking  for 
ore.  At  night  I  came  to  a  small  village,  and  at  once  went  to 
the  store  to  get  some  food.  There  was  a  bright  young  fellow 
behind  the  counter.  i  I'll  give  you  the  best  we  have,'  he  said, 
when  I  asked  for  something  to  eat.  He  went  to  the  rear  of 
the  store  and  came  back  with  a  plate  of  cheese  and  crackers. 
The  young  man's  name,  as  I  learned  afterward,  was  Henry 
C.  Prick." 

There  was  a  strange  new  trade  just  beginning  near  the 
village  of  Mount  Pleasant,  where  the  boy  was  working.  It 
was  called  coke-making.  Coal  was  dug  up  and  baked  in 
brick  ovens  until  it  turned  into  crisp  gray  lumps.  Then  it 
was  used  by  the  iron-makers  when  they  smelted  the  iron  ore. 
It  was  a  picturesque  process,  with  its  blazing  ovens  and  fierce- 
looking  workmen.  The  boy  was  only  earning  three  dollars 
and  fifty  cents  a  week,  but  in  four  or  five  years  he  had  saved 
enough  to  buy  a  small  piece  of  coal  land,  and  his  brain  was 
full  of  schemes  to  get  capital.  He  was  determined  to  make 
coke.  At  nineteen  his  grandfather  noticed  what  an  able  young 
man  he  had  become  and  employed  him  as  bookkeeper  in  a 
distillery.  There  were  coke  ovens  near  the  distillery,  and 
the  boy  was  not  satisfied  until  he  had  persuaded  his  grand- 
father and  uncle  to  buy  some  of  them. 

Then  came  the  panic  of  1873.  The  price  of  coke  dropped 
to  ninety  cents  a  ton — less  than  cost.  The  coke-makers  lost 

105 


THE   ROMANCE   OF   STEEL 

hope  and  wanted  to  sell  at  any  price.  Half  of  them  toppled 
over  into  bankruptcy.  By  this  time  the  boy  had  become  a 
full-grown  man  of  twenty-four.  At  the  time  when  every  one  in 
the  district  was  cursing  coke,  he  quietly  made  up  his  own  mind 
to  stake  his  future  on  it.  Public  opinion  had  no  more  effect 
upon  him  than  the  spray  has  upon  Gibraltar.  And  so  it 
happened  that  Mr.  Mellon,  a  Pittsburgh  banker,  received  a 
letter  requesting  the  loan  of  twenty  thousand  dollars,  signed 
with  the  unknown  name  of  Henry  C.  Frick.  The  writer 
offered  no  security,  but  promised  big  profits  if  the  money  was 
invested  at  once. 

"  Better  investigate  this  man's  proposition,"  said  the 
banker. 

His  partner  went  to  Mount  Pleasant  and  inquired  for 
H.  C.  Frick. 

"That's  the  young  fellow  that  keeps  books  for  his  grand- 
father, old  Oberholt,"  said  a  villager.  "  He's  got  a  room  in 
one  of  them  little  cottages  over  near  the  distillery." 

The  banker  had  expected  to  meet  a  man  of  wealth  and 
property.  Instead  he  found  a  short,  thick-set  young  clerk 
who  was  living  in  one  room  of  a  coal-miner's  home.  It  was 
nothing  but  a  house  of  rough  boards,  with  a  miner  and  his 
family  occupying  the  remaining  rooms ;  but  the  young  clerk's 
corner  was  so  clean,  neat,  and  businesslike  that  the  banker  was 
impressed  very  favourably.  The  man  who  to-day  occupies  a 
Vanderbilt  mansion  on  Fifth  Avenue,  New  York,  and  owns 
the  finest  skyscraper  in  Pittsburgh,  was  at  that  time  putting 
every  possible  cent  of  his  nine-hundred-dollar  salary  into  coal 
lands,  and  had  nothing  left  for  luxuries. 

The  banker  had  worked  his  own  way  up  from  poverty.  He 
had  been  a  Mississippi  pilot  and  coal-dealer.  Consequently 
he  gave  a  fair  hearing  to  the  young  clerk,  and  saw  that  the 
scheme  was  safe  and  well  planned.  He  was  also  a  well- 
known  Methodist  and  prohibitionist,  and  when  the  shrewd 

1 06 


THOMAS    LYNCH 


CARNEGIE   COMPANY   UNDER    FRICK 

clerk  suggested  that  the  distillery  should  be  shut  down  and 
its  warehouse  used  for  a  Methodist  church,  there  was  no 
longer  any  hesitation  about  closing  the  deal.  The  twenty 
thousand  dollars  was  given  to  young  Frick,  and  he  became 
at  a  bound  the  foremost  coke-maker  in  the  district. 


FRICK    AS   THE    KING   OF   COKE 

In  two  years  more  the  pendulum  had  swung  back  to  pros- 
perity. Coke  leaped  to  three  dollars  a  ton,  then  four,  then 
five.  Frick  &  Company  made  a  hundred  per  cent,  in  1875, 
and  every  dollar  of  profit  was  spent  in  buying  more  land  and 
building  more  ovens.  By  1889  Henry  Clay  Frick  was  the 
coke  king,  with  eleven  thousand  workmen  obeying  his  orders. 
His  twenty  thousand  dollars  of  borrowed  capital  had  grown 
to  five  millions,  mostly  his  own.  There  were  fifteen  thousand 
coke  ovens  in  the  entire  Connellsville  region,  and  ten  thou- 
sand of  them  belonged  to  the  resolute,  masterful  man  who 
had  not  only  dared  to  dream  of  millions  in  a  coal-miner's 
cottage,  but  had  made  that  dream  come  true. 

Frick  brought  order  out  of  chaos  in  the  coke  business.  He 
invited  his  ablest  competitors — such  men  as  E.  M.  Ferguson 
and  S.  L.  Schoonmaker — into  partnership,  and  forced  out 
or  bought  out  the  others.  This  prevented  the  cutthroat  com- 
petition which  had  kept  the  coke-makers  poor.  Next  came 
the  question  of  labour.  Frick  tried  making  contracts  with  the 
trade  unions,  and  failed.  Then  he  took  a  step  which  entirely 
changed  the  whole  labour  situation  in  western  Pennsylvania 
—he  brought  in  the  Huns  and  the  Slavs.  For  a  time  this 
meant  a  race  war,  but  with  the  aid  of  Pinkertons  Frick  utterly 
destroyed  the  unions. 

It  was  not  so  much  a  question  of  wages  as  of  authority. 
Frick  was  not  a  labour  crusher;  but  he  abhorred  revolt  and 
disorder.  On  the  whole,  he  has  raised  wages,  abolished 

107 


THE   ROMANCE   OF  STEEL 

abuses,  and  improved  the  mines  and  villages  since  his  word 
became  law.  His  first  trouble  with  the  Huns  and  Slavs  was, 
in  fact,  to  prevent  them  from  compelling  their  wives,  mothers, 
and  sisters  to  work  at  the  scorching  ovens.  A  State  law  had 
been  passed  forbidding  female  labour  at  the  ovens,  and  the 
newcomers  declared  a  strike  when  Frick  enforced  it. 

Whatever  Mr.  Frick  touched  he  improved.  He  found 
two  dozen  coke  ovens  in  the  Connellsville  region,  and  left 
twelve  thousand  belonging  to  his  own  company.  He  found 
shanties  and  left  comfortable  cottages.  He  found  a  few 
hundred  labourers,  with  irregular  work  and  small  pay,  and 
left  eighteen  thousand  workmen  with  steady  jobs  and  fair 
wages.  He  found  crude  little  plants,  operating  on  a  small 
scale  at  high  cost,  and  left  a  ten-million-dollar  corporation. 
In  his  childhood  village  of  Mount  Pleasant,  where  he  worked 
for  sixty  cents  a  day,  there  stands  to-day  the  largest  coke  plant 
in  the  world,  operating  nine  hundred  and  eight  ovens  and 
filling  one  hundred  and  twenty-five  cars  every  twenty-four 

hours. 
* 

THE  REGION  OF  THE  "  H.  C.  F.  C.  CO." 

This  province  of  Connellsville,  over  which  Mr.  Frick  had 
become  the  industrial  governor,  contains  about  a  hundred  and 
fifty  square  miles.  Underneath  its  grassy  slopes  lies  buried 
an  immense  field  of  coal,  peculiarly  suitable  for  coke-making. 
To  most  people,  all  coal  looks  alike;  but  to  the  "  coal  sharp," 
there  are  as  many  kinds  of  coal  as  there  are  of  breakfast  food. 
And  it  is  generally  agreed  that  Connellsville  coal  makes  the 
highest  grade  coke.  It  has  a  harder  fibre,  carries  the  burden 
of  a  furnace  better,  and  gives  a  hotter  fire,  than  the  coke  made 
from  other  coals.  At  the  Chicago  World's  Fair,  Mr.  Frick 
called  attention  to  Connellsville  by  giving  an  eighty-thou- 
sand-dollar exhibition  of  its  coke. 

To-day  the  Connellsville  region  is  from  end  to  end  the 

108 


/   ^    OF  THE 

UNIVERSITY 


CARNEGIE    COMPANY   UNDER   FRICK 

Land  of  Frick.  On  every  hand  you  see  the  symbol  of  his 
ownership,  "  H.  C.  F.  C.  Co.,"  although  his  company  is  now 
only  one  of  the  counters  of  the  Steel  Trust's  department  store. 
It  is  a  land  of  flame  and  smoke,  of  rusty  rivers,  green  hills 
cleft  by  winding  railroads,  checkerboard  villages,  and  sullen, 
swarthy  Huns  and  Slavs.  Here  muscle  still  holds  the  fort 
against  machinery.  Workmen  dash  like  salamanders  from 
fire  to  fire.  A  stranger  from  Mars  might  easily  imagine  that 
it  was  a  region  of  little  walled  towns,  with  fires  built  in  the 
walls  to  repel  invaders. 

The  long  rows  of  ovens  curve  around  each  cluster  of  cot- 
tages, and  as  the  men  shout  and  shovel  around  the  blazing 
ramparts,  their  desperate  vigour  is  far  more  suggestive  of  war 
than  peace.  The  men  battle  with  fire  and  the  women  with 
smoke.  Everybody  works.  The  superintendents  look  for- 
ward to  offices  in  the  steel  and  marble  Frick  building,  in 
Pittsburgh;  the  workmen  dream  of  five  thousand  dollars 
apiece  and  little  farms  on  the  Danube.  It  would  be  impossi- 
ble to  live  in  the  Connellsville  region  without  hopes  and 
dreams. 

FRICK    ENTERS    THE    CARNEGIE    COMPANY 

Until  1882  the  Carnegie  company  owned  no  coke  ovens. 
Then  it  bought  control  of  the  Frick  company.  Mr.  Car- 
negie's keen  eye  took  notice  of  the  unerring  judgment  of 
Frick.  Here,  at  last,  was  a  real  industrial  general,  to  whom 
he  could  entrust  the  command  of  his  whole  army.  For  seven 
years  he  watched  Frick,  and  every  year  his  admiration  in-  i 
creased.  His  growing  company  needed  an  organiser.  And 
so,  in  1889,  he  appointed  Frick  commander-in-chief  of  all 
his  forces. 

Without  the  investment  of  a  dollar,  Frick  became  a  part- 
ner in  the  Carnegie  company.  Carnegie  gave  him  five  per 
cent,  of  the  stock,  for  which  Frick  gave  his  notes.  The  stock 


THE   ROMANCE   OF   STEEL 


paid  for  itself  in  a  few  years  of  big  profits.  Later,  Frick  got 
six  per  cent,  more,  on  the  same  terms;  but  in  a  year  of  low 
profits  he  sold  back  five  per  cent,  to  Carnegie,  who  was  always 
a  buyer  when  the  others  wished  to  sell. 

The  Carnegie  company  moved  now  from  the  age  of 
millions  to  the  age  of  many  millions.  As  the  business  grew, 
the  number  of  original  partners  diminished.  Some  had  died; 
most  of  the  others  had  withdrawn  willingly,  leaving  Andrew 
Carnegie,  as  they  thought,  to  be  the  Casabianca  of  the  Pitts- 
burgh steel  trade. 

All  other  iron  and  steel  magnates,  with  the  exception  of 
Carnegie,  lived  in  Pittsburgh  and  were  swayed  constantly 
by  the  local  gossip,  by  the  labour  troubles,  and  by  the  rumours 
of  competition  and  low  prices  that  floated  from  office  to  office. 
To-day  they  were  elated;  to-morrow  they  were  depressed. 
To-day  they  bought;  to-morrow  they  sold. 

Carnegie,  on  the  other  hand,  deliberately  placed  himself 
where  these  little  ups  and  downs  were  unnoticed.  As  he  sat 
on  the  deck  of  a  Pacific  steamer,  or  fished  for  trout  in  a  High- 
land loch,  the  news  that  Coleman  had  quarrelled  with  Shinn, 
or  that  the  coke-drawers  wanted  five  cents  a  day  more,  was 
of  small  consequence.  One  thing  he  knew — that  civilisation 
needed  steel  and  was  able  to  pay  for  it.  All  else  was  not 
worth  troubling  about.  And  so  in  good  times  he  whipped  on 
his  workers  to  beat  every  previous  record;  and  in  bad  times, 
when  prices  were  low,  he  bought  other  plants  or  built 
new  ones. 

THE   ANNEXATION    OF    HOMESTEAD 

The  way  in  which  he  came  into  possession  of  the  great 
Homestead  works  is  a  striking  illustration  of  what  his  com- 
petitors called  "Carnegie  luck."  In  1880  seven  of  these 
competitors,  all  able  and  wealthy  men,  raised  a  quarter  of  a 

no 


CARNEGIE    COMPANY    UNDER    FRICK 

million  and  built  a  steel-mill  to  get  some  of  the  Carnegie 
company's  business.  Up  to  this  time  Carnegie  had  been  the 
only  maker  of  steel  rails  in  the  Pittsburgh  district;  but  this 
new  plant  promised  to  produce  three  hundred  thousand  tons 
a  year.  For  a  while  it  looked  as  if  the  profits  would  be  cut 
in  two;  and  if  the  Homestead  mill  had  been  ably  managed, 
the  history  of  steel  might  have  had  a  different  set  of  heroes. 

The  new  plant  was  running  full  blast  fifteen  months  after 
the  first  spade  had  been  put  into  the  ground — a  record-break- 
ing achievement.  It  began  with  a  blare  of  trumpets.  Two 
hundred  tons  of  rails,  a  day  were  squeezed  into  shape  between 
its  whirling  rollers.  Its  equipment  was  the  best  that  money 
and  brains  could  make.  Advance  orders  had  been  booked. 
Apparently,  the  new  firm  had  a  mortgage  on  prosperity, 
when  suddenly  the  whole  enterprise  was  paralysed  by  a 
series  of  labour  troubles.  The  Amalgamated  Association  of 
Iron  and  Steel  Workers  rose  up  and  dealt  the  company  blow 
after  blow. 

The  association  was  not  then  the  fragment  that  it  is  to-day. 
It  numbered  seventy  thousand  members.  There  was  scarcely 
a  non-union  steel  worker  in  the  United  States.  It  was  six 
years  old,  and  flushed  with  a  dozen  small  victories. 

For  several  months  there  were  lockouts,  strikes,  riots,  and 
quarrels  among  the  partners.  The  price  of  steel  began  to 
fall.  Trade  grew  worse  daily.  More  capital  was  demanded 
of  the  stockholders.  It  was  only  an  eclipse  of  the  sun  at  noon, 
but  the  owners  of  the  new  concern  believed  that  night  had 
come.  They  decided  to  sell  out  to  Carnegie,  but  they  were 
afraid  that  he  would  get  the  best  of  the  deal,  and  held  several 
meetings  to  rehearse  what  they  would  say  to  him.  Then  they 
called  him  in.  It  was  one  of  the  dramatic  moments  of  the 
story  of  steel. 

"  Gentlemen,"  said  Carnegie,  "  I  am  willing  to  do  what 
you  say — and  more.  I  will  allow  you  every  dollar  that  Home- 
in 


THE   ROMANCE   OF  STEEL 

stead  has  cost  you,  and  I  will  invite  you  all  into  our  company 
as  partners." 

The  partners  were  speechless.  They  were  loaded  to  the 
muzzle  against  Carnegie,  but  this  square  deal  disarmed  them. 
They  moved  to  adjourn.  Next  morning  one  of  them,  W.  H0 
Singer,  entered  Carnegie's  office  and  said: 

"Were  you  in  earnest  yesterday?  Would  you  really  take 
me  for  a  partner?" 

"Of  course  I  would,"  replied  Carnegie.    "Shake,  pard." 

Singer  remained  a  partner  of  Carnegie  to  the  end,  and  saw 
the  fifty  thousand  dollars  which  he  had  invested  swell  into 
many  millions.  As  for  his  associates,  they  were  afraid  of 
Carnegie  and  disgusted  with  steel.  They  took  their  pay  in 
notes,  and  handed  Homestead  to  Carnegie  with  the  feeling 
of  complacency  which  a  man  possesses  after  having  traded 
a  balky  horse  for  a  corner  lot. 

In  a  short  time  the  labour  troubles  were  smoothed  out. 
Prices  rose.  Business  revived.  And  in  two  years  the  Home- 
stead plant  had  paid  for  itself.  Practically,  the  Carnegie 
company  got  it  for  nothing — nothing  but  pluck  and  enter- 
prise and  faith  in  the  future  of  steel. 

To  the  further  amazement  of  Pittsburgh,  as  soon  as  the 
company  had  bought  this  "  gold  brick "  Homestead  plant, 
hundreds  of  thousands  were  spent  in  improving  it.  Julian 
Kennedy  was  put  in  charge — a  man  who,  as  an  all-around 
steel  engineer,  has  probably  never  had  a  superior  in  any 
country.  Kennedy  had  equalled  even  Captain  Jones  as  a  steel- 
maker, and  now  he  set  to  work  to  make  a  steel-mill  which 
was  then,  and  is  to-day,  the  wonder  of  the  engineering  world. 
Instead  of  making  steel  ingots  and  bars,  which  had  to  be  sold 
as  mere  raw  material,  the  Homestead  works  began  to  produce 
beams,  girders,  and  all  manner  of  structural  shapes.  At  that 
time  there  was  no  strong  demand  for  such  things,  and  Pitts- 
burgh once  more  prophesied  failure  for  Carnegie  and  Phipps. 

112 


JULIAN    KENNEDY 


CARNEGIE   COMPANY   UNDER   FRICK 

As  if  the  very  stars  in  their  courses  were  silent  partners  of 
the  two  comrades  who  had  battled  up  to  greatness  from  Bare- 
foot Square,  the  skyscraper  age  began  in  the  same  year  that 
this  Homestead  mill  was  finished.  The  Rookery,  in  Chicago 
— first  of  all  the  giant  steel  buildings  which  give  distinctive- 
ness  to  American  cities — was  built  in  1887,  and  others  fol- 
lowed in  quick  succession.  At  the  same  time  came  a  boom 
in  the  building  of  steel  bridges.  The  Pittsburgh  croakers 
gasped  to  see  the  Homestead  "  failure "  running  night  and 
day  to  catch  up  with  its  orders.  Carnegie  had  foreseen  the 
coming  of  a  steel-ribbed  civilisation,  and  his  company  was 
now  the  owner  of  the  best  steel-works  in  existence. 

Years  afterwards,  Mr.  Carnegie  was  sitting  in  the  home  of 
his  friend,  James  G.  Blaine.  Pointing  to  the  ceiling,  he  said: 

"  There  is  a  steel  beam  there  that  was  made  in  our  Home- 
stead mill.  The  mill  cost  us  a  million  to  build,  but  we  made 
a  clear  million  in  profits  before  any  one  else  had  time  to 
build  one  like  it.  We  started  ahead  of  them  all,  and  so  we  were 
able  to  hold  the  cream  of  the  business." 


THE   CONQUEST    OF   DUQUESNE 

Take  one  more  illustration  of  the  "  Carnegie  luck  "  and  the 
Frick  financiering — the  acquisition  of  the  magnificent  steel-' 
works  at  Duquesne  without  the  outlay  of  a  single  dollar. 
Nothing  that  equals  this  financial  legerdemain  has  ever  been 
known  before  or  since  in  the  iron  and  steel  trade.  Among 
all  the  industrial  battles  fought  and  won  by  Carnegie  and  his 
captains,  the  victory  of  Duquesne  will  always  stand  out  as 
the  most  complete  and  decisive. 

Three  years  after  the  capture  of  Homestead  by  the  Car- 
negie group,  three  or  four  of  the  seven  defeated  competitors 
took  their  purchase  money,  added  twice  as  much  to  it,  and 
began  to  build  a  second  steel-mill.  They  had  realised  their, 

113 


THE   ROMANCE   OF   STEEL 

mistake  in  parting  with  the  Homestead  works,  and  they  were 
determined  to  "  beat  Carnegie  this  time."  They  bought  a 
tract  of  land  on  the  Monongahela  River,  a  few  miles  above 
Homestead,  and  in  three  years  had  a  plant  which  was  a 
marvel  for  handiness  and  speed.  It  was  practically  a  "  con- 
tinuous "  mill — one  in  which  the  steel  ingots  did  not  require 
to  be  reheated,  but  were  sent  continuously  through  the  whole 
process  of  rail-making.  Dozens  of  new  labour-saving  devices 
were  introduced.  The  partners  had  lost  Homestead  because 
of  labour  troubles,  and  in  the  Duquesne  works  they  had  as 
few  workmen  as  possible.  In  fact,  so  successful  were  they  in 
replacing  men  by  machinery  that  the  labour  cost  of  their  steel 
was  cut  exactly  in  half. 

The  Carnegie  company  at  once  showed  fight.  The  Du- 
quesne company  was  kept  out  of  the  rail  pool.  It  found 
itself  forced  out — ostracised — boycotted.  It  was  compelled 
to  pick  up  the  crumbs  from  the  table  at  which  its  competitors 
were  dining.  Necessity  compelled  it  to  accept  undesira- 
ble contracts.  The  steel  went  out,  but  the  money  did  not 
come  in. 

Then  the  Duquesne  manager  repeated  the  mistake  of  Home- 
stead, and  picked  a  quarrel  with  the  Amalgamated  Associa- 
tion. Offensive  signs  were  nailed  up  at  the  gates,  announcing 
that  "  No  Union  Men  Are  Allowed  on  These  Works."  All 
these  difficulties  set  the  partners  wrangling,  as  they  had 
before;  and  at  the  psychological  moment  Frick  made  an  offer 
of  six  hundred  thousand  dollars  for  the  plant.  This  was 
about  half  what  it  had  cost,  and  the  suggestion  did  not  help 
to  put  the  partners  in  a  more  optimistic  mood.  A  year  later 
he  raised  the  price  to  a  million  dollars,  payable  in  bonds,  not 
cash. 

To  conclude  the  bargain,  William  Park  went  with  Frick  to 
Carnegie's  house.  Frick  was  inclined  to  beat  Park's  price 
down  still  lower;  but  as  the  three  men  were  walking  down- 

114 


CARNEGIE    COMPANY    UNDER    FRICK 

stairs  to  luncheon,  Carnegie  whispered  to  Frick — "  We  get  the 
turkey;  don't  grudge  Park  a  few  feathers."  Frick  yielded 
his  point,  and  the  deal  was  made.  Park  got  the  feathers. 

The  Carnegie  company  took  possession,  speeded  up  the 
steel-mill  to  a  Captain  Jones  gait,  and  in  less  than  one  year 
cleared  a  million  dollars'  profit.  Carnegie  had  captured  the 
Port  Arthur  of  his  competitors,  and  it  had  not  cost  him  a 
drop  of  blood  nor  an  ounce  of  powder.  In  twelve  months 
there  was  not  a  nickel  less  in  the  Carnegie  treasury,  and  he 
was  the  master  of  a  steel  city  which  to-day  makes  more  than 
three  per  cent,  of  all  the  steel  in  the  world.  By  the  time  the 
bonds  came  due,  the  Duquesne  plant  had  paid  for  itself  six 
times  over.  And  so,  in  1890,  Carnegie,  Phipps,  and  Frick 
secured  another  province  in  the  steel  world  for  nothing — 
nothing  except  the  skilful  use  of  those  business  methods 
which  our  generals  of  industry  have  either  practised  or 
permitted. 

A    MARVELLOUS    INDUSTRIAL    MECHANISM 

Thomas  Morrison,  a  distant  relation  of  Andrew  Carnegie, 
was  put  in  charge  of  Duquesne.  He  was  young  and  inexperi- 
enced; but  the  responsibility  ripened  him  at  once  into  an  able 
manager.  He  made  peace  with  the  workmen  and  started  the 
immense  plant  on  its  record-breaking  career.  For  four  years 
the  Duquesne  furnaces  held  the  world's  record.  In  one  month 
they  made  more  iron  than  all  the  furnaces  in  the  United  States 
had  produced  during  President  Monroe's  first  term  of  office. 
An  output  of  twenty-six  hundred  and  fifty  tons  of  iron  a  day 
from  four  furnaces  was  an  achievement  that  would  have 
seemed  absolutely  incredible  not  long  before. 

Money  was  lavished  on  Duquesne  to  make  it  as  nearly  as 
possible  automatic.  It  is  said  that  an  inventive  friend  of 
Charles  M.  Schwab  approached  him  one  day  and  said: 


THE   ROMANCE   OF   STEEL 

"  Will  you  back  me  in  selling  a  non-nicotine,  continuous  to- 
bacco pipe?" 

"  No,"  replied  Schwab,  "  but  I'll  back  you  if  you'll  invent: 
a  continuous  steel-mill." 

This  incident  implanted  the  project  of  a  wholly  continuous; 
steel-mill  in  the  mind  of  Mr.  Schwab.  He  proposed  it  to  Mr, 
Carnegie,  who  said: 

"Good!    Go  ahead  and  build  one." 

The  final  result  is  a  mill  which  is  so  well  arranged  as  to  be 
practically  one  great  machine.  At  one  end  stand  the  furnaces 
and  ore  piles;  at  the  other  the  steel  bars  drop  into  the  cooling- 
pit  at  the  rate  of  one  a  second,  and  the  loaded  freight-cars 
twist  noisily  out  of  the  yard. 

By  1892  the  Carnegie  Steel  Company  Limited  had  grown 
into  a  twenty-five  million  dollar  concern,  and  under  the  leader- 
ship of  Frick  it  was  becoming  a  complete  industrial  unit.  The 
scattered  works  were  unified  by  the  building  of  the  Union 
Railway.  The  different  railroads  had  been  making  trouble 
about  their  "  rights  "  inside  the  yards  of  the  steel-plants.  Frick 
settled  the  dispute  by  putting  all  the  railroads  outside  the  fence, 
and  constructing  a  company  road.  This  improvement  at  once 
saved  enough  in  switching-charges  alone  to  pay  interest  on 
the  cost  of  the  whole  railroad.  The  ejected  railroads,  to  prove 
that  they  cherished  no  resentment,  granted  a  rebate  of  twenty- 
five  cents  a  ton  on  ore.  Which  of  them  could  dare  to  quarrel 
with  a  company  that  handled  sixteen  million  tons  of  freight  a 
year?  Thus  the  Union  Railroad,  like  the  Homestead  and 
Duquesne  steel-works,  was  made  to  pay  for  itself  in  a  few 
months. 

The  fourth  step  in  the  development  of  this  corporate  social- 
ism was  the  acquiring  of  ore  mines,  in  the  Lake  Superior  re- 
gion. This,  too,  was  managed  so  that  the  property  did  not  cost 
the  company  a  dollar.  It  wras  also  a  miracle  of  "  high  finance," 
but  one  in  which  no  competitor  was  disabled. 

116 


CARNEGIE   COMPANY   UNDER   FRICK 

OLIVER    AND    THE    ORE    FIELDS 

Among  the  boyhood  companions  of  Andrew  Carnegie  in 
Allegheny  there  had  been  a  boy  called  Harry  Oliver.  He  had 
grown  up  to  be  a  shrewd  business  man — one  who  made  for- 
tunes cheerfully  and  lost  them  cheerfully.  He  was  a  steel- 
maker, but  had  never  been  in  any  Carnegie  enterprise.  Harry 
and  Andy  had  been  messenger-boys  together.  Soon  after  Lon 
Merritt  had  opened  up  the  Mesaba  Range  in  1892,  Oliver  saw- 
its  value,  and  bought  a  large  tract  of  land  there.  About  the 
time  his  mines  were  beginning  to  ship  ore,  he  met  Frick  one 
morning  in  Pittsburgh. 

"Why  cannot  we  go  in  with  you  in  this  Mesaba  ore  busi- 
ness? "  asked  Frick. 

"  On  what  terms?  "  replied  Oliver. 

"  Well,"  said  Frick,  "  give  us  five-sixths  of  your  ore  stock 
and  we'll  lend  you  half  a  million  dollars  to  develop  the  mines." 

"Agreed,"  said  Oliver,  and  so  a  property  which  is  to-day 
worth  tens  of  millions  was  obtained  as  a  gift  from  Oliver,  who 
did  his  best  day's  work  when  he  made  an  alliance  with  the  pow- 
erful Carnegie  group. 

Four  years  later,  Frick  and  Oliver  joined  forces  with  John 
D.  Rockefeller  in  the  Lake  Superior  ore  business.  This  com- 
bination created  a  panic  among  the  other  mine-owners.  Ore 
dropped  from  six  dollars  a  ton  to  less  than  three.  Dozens  of 
mines,  worth  millions,  were  tossed  on  the  bargain  counter  and 
sold  to  Frick  and  Oliver  for  thousands.  Rockefeller  showed 
no  desire  to  buy  mines,  but  merely  stipulated  that  his  railroads 
and  steamships  should  have  the  carrying  of  the  ore  to  the  Lake 
Erie  ports.  He  went  further,  and  leased  the  mines  which  he 
had  already  acquired  to  Frick  and  Oliver  for  a  royalty  of 
twenty-five  cents  a  ton.  This  was  forty  cents  below  the  usual 
price,  and  meant  more  millions  to  the  Carnegie-Phipps-Frick 
combination. 

117 


THE   ROMANCE   OF   STEEL 

For  a  year  or  more  Oliver  worked  like  a  beaver,  buying  in 
mines  from  the  demoralised  owners.  When  the  panic  was 
over,  the  Carnegie  company  figured  up  its  winnings,  and 
found  that  it  was  the  possessor  of  a  hundred  million  tons  of  ore, 
which  Charles  M.  Schwab  has  since  valued  at  a  dollar  a  ton. 
It  had  bought  in  a  hundred  million  dollars'  worth  of  raw 
material  for  the  price  of  a  few  farms. 

OLIVER'S  PICTURESQUE  CAREER 

Henry  W.  Oliver  was  one  of  the  most  picturesque  knights 
errant  of  Pittsburgh.  His  life  was  a  series  of  magnificent  cli- 
maxes, of  startling  successes  and  crashing  failures.  He  packed 
the  experiences  of  half  a  dozen  lifetimes  into  one.  As  a  busi- 
ness man  he  was  a  marvel  of  force  and  elasticity.  The  harder 
he  was  thrown  down,  the  higher  he  would  rebound.  His 
optimism  was  at  all  times  invulnerable.  In  his  power  of  re- 
cuperation he  had  no  equal  in  his  generation.  His  parents 
were  poor  Irish  people,  who  emigrated  from  County  Tyrone 
when  he  was  a  small  boy.  His  first  job  was  as  messenger  in  a 
Pittsburgh  telegraph-office.  When  the  first  shot  of  the  Civil 
War  was  fired,  he  sprang  to  the  defence  of  the  Union,  and  con- 
tinued to  be  a  prominent  Republican  until  his  death. 

His  first  rise  and  fall  was  in  the  nut  and  bolt  business.  In 
this  enterprise  his  employees  at  one  time  saved  him  from  fail- 
ure by  working  for  two  weeks  without  wages.  For  years  he 
plunged  from  one  scheme  to  another,  incidentally  founding  the 
pressed  steel  car  industry.  In  1892  he  was  elected  a  delegate 
to  the  national  Republican  convention  at  Minneapolis.  While 
there,  he  heard  for  the  first  time  of  the  discovery  of  the  Mesaba 
Range,  and  hurried  up  to  Duluth.  He  found  the  town 
crowded  with  prospectors.  Every  hotel  was  full,  and  he  was 
obliged  to  sleep  on  a  billiard-table. 

The  next  morning  he  bought  a  horse  and  rode  through  the 

118 


CARNEGIE   COMPANY   UNDER   FRICK 

wilderness  to  the  new  ore  mines.  It  was  a  rough  ride  for  a 
man  unused  to  the  woods.  At  nights  he  lay  on  the  ground 
and  listened  to  the  howling  of  the  timber-wolves.  When  he 
reached  the  camp  of  the  Merritt  brothers,  they  showed  him 
iron  mines  out  of  which  the  ore  could  be  dug  like  sand.  Here 
were  scores,  perhaps  hundreds,  of  millions  of  tons,  and  no  one 
in  Pittsburgh  had  as  yet  bought  a  pound  of  it.  Oliver  leased 
a  large  mine  from  the  Merritts,  and  on  his  return  to  Pittsburgh 
Frick  became  his  partner.  Nine  years  afterward  that  ride 
through  the  wilderness  netted  him  thirteen  million  dollars. 
It  made  him,  in  the  Carnegie  company,  the  man  behind  the 
ore. 

As  Carnegie  said  to  me,  "  Harry  Oliver  was  a  man  who  saw 
far  ahead.  He  could  not  carry  all  the  game  he  had  captured, 
and  appealed  to  the  Carnegie  company  to  join  him.  It  did, 
and  carried  the  treasure  safely  through  with  its  money  and 
credit." 

"  The  Oliver  luck,"  is  a  Pittsburgh  phrase.  Strictly  speak- 
ing, it  meant  a  compound  of  one  part  chance  and  two  parts 
energy — the  "  luck"  of  a  man  who  falls  out  of  a  three-story 
window  and  invents  a  flying-machine.  His  creditors  were 
always  the  first  to  lend  him  more  money  when  he  was  in  diffi- 
culties. When  he  bought  his  first  Mesaba  mine,  he  gave  a 
check  for  the  price — five  thousand  dollars — although  he  had 
not  a  cent  on  deposit  at  the  time.  He  telegraphed  to  the  bank 
to  cash  the  check,  and  had  no  trouble  in  carrying  the  deal 
through.  The  insignificant  fact  that  he  had  no  money  avail- 
able never  blocked  the  plans  of  Harry  Oliver. 

He  was  never  the  servant  of  other  people's  opinions.  On  one 
occasion  he  sent  an  agent  to  report  on  a  piece  of  mining  land. 
The  agent  wrote  back  a  long  report,  unfavourable  in  every 
particular. 

"  I  think  he's  mistaken,"  said  Oliver.    "  I'll  take  it." 

In  a  short  time  the  land  proved  to  be  worth  double  what  he 

119* 


THE   ROMANCE   OF  STEEL 

had  paid  for  it.  No  one  bore  the  risks  of  commerce  more  easily 
than  Oliver.  When  his  partners  grumbled  at  the  large  amount 
of  money  that  he  was  spending  on  a  new  mine,  he  replied 
cheerily: 

"  Well,  if  it  does  f ai^  we'll  have  the  finest  mining-shaft  in 
the  world!" 

After  Rockefeller  had  squeezed  out  the  Merritt  brothers, 
he  became  Oliver's  landlord,  and  during  1894  Oliver  was 
forty  thousand  dollars  behind  in  his  payments.  The  Rocke- 
feller agents  demanded  an  immediate  settlement.  Oliver  hur- 
ried to  New  York,  but  was  not  allowed  to  see  Rockefeller. 

"  I  trust  you  will  remember  that  this  is  not  a  charitable  in- 
stitution, Mr.  Oliver,"  said  one  of  the  junior  partners. 

As  Oliver  walked  out  of  the  office,  he  met  a  negro  porter 
in  the  hall.  Slipping  a  twenty-dollar  bill  into  the  porter's 
hand,  he  said: 

"  See  here,  George,  is  Mr.  John  D.  Rockefeller  in  that  in- 
side room?  " 

"  Yes,  sir." 

"  Well,"  said  Oliver,  "  when  these  other  men  go  to  lunch, 
you  might  accidentally  leave  his  door  unlocked,  that's  all." 

Oliver  waited  in  the  hall  until  he  saw  the  junior  partners 
vanish  down  the  elevator;  then  he  slipped  into  the  inside  room 
and  found  his  dreaded  creditor  fast  asleep,  with  a  handker- 
chief over  his  face.  In  about  ten  minutes  Rockefeller  awoke, 
and  Oliver  told  his  story.  It  impressed  Rockefeller  favourably, 
and  in  a  few  minutes  more  he  wrote  a  short  note,  affixed  his 
magic  signature,  and  Oliver  was  saved. 

BRINGING  THE   ORE   TO   PITTSBURGH 

The  Carnegie  company  had  now  ore  enough  to  last  for  gen- 
erations; but  it  was  a  thousand  miles  from  Pittsburgh,  over 
land  and  lake.  The  next  problem  to  solve  was  that  of  cheap 

1 20 


CARNEGIE   COMPANY   UNDER   FRICK 

transportation.  There  was  a  rickety,  penniless  little  railway 
which  owned  a  "  right  of  way  and  two  streaks  of  rust "  from 
Pittsburgh  to  Lake  Erie.  It  had  terminal  facilities  at  Con- 
neaut,  and  there  was  no  reason  why  it  should  not  have  done 
business.  But  it  had  been  a  failure  from  the  first,  staggering 
from  one  misfortune  to  another.  Andrew  Carnegie  went  to  its 
president  and  said: 

"  Your  railroad  is  on  the  verge  of  bankruptcy.  Let  me  re- 
organise it.  I  will  extend  it  to  our  steel-works  and  make  it 
one  of  the  best  roads  in  the  world.  I  will  pay  you  in  bonds, 
which  our  enormous  traffic  will  make  gilt-edged." 

The  president  consented,  glad  to  escape  from  his  financial 
difficulties  so  happily. 

In  fifteen  months  the  two  hundred  and  twelve  miles  of  this 
road  were  entirely  rebuilt.  They  were  laid  with  heavy  steel 
rails,  and  strong  steel  bridges  replaced  the  ramshackle  wooden 
trestles.  The  most  powerful  locomotives  ever  built,  up  to  that 
time,  were  put  on  the  line.  To-day  the  Bessemer  &  Lake  Erie, 
as  it  is  called,  has  a  hundred  locomotives  and  ten  thousand  cars. 
Its  cost  of  carrying  freight  is  less  than  that  of  any  other  Ameri- 
can railroad;  and  it  was  acquired  without  the  withdrawal  of 
one  dollar  in  cash  from  the  Carnegie  treasury.  Carnegie 
himself  deserves  all  the  credit  for  this  purchase,  as  all  his 
partners  disapproved  of  it. 

Until  1899  tne  Rockefeller  ore  fleet  carried  all  the  Carnegie 
ore.  Then  a  small  fleet  of  six  vessels  was  bought — by  means 
of  an  issue  of  bonds,  as  usual.  This  fleet  has  grown  yearly  until 
to-day  it  has  one  hundred  and  sixteen  vessels  carrying  more 
than  ten  million  tons  of  ore  in  a  season,  and  earning  a  gross 
income  of  nearly  ten  million  dollars.  This  was  the  last  link 
in  the  chain.  The  Carnegie  company  had  wiped  out  all  the 
middlemen,  and  now  owned  all  its  means  of  production  and 
distribution.  It  pocketed  all  the  profits,  from  the  ore  in  the 
ground  to  the  finished  rail  and  girder.  As  an  elaborate  in- 

121 


THE   ROMANCE   OF  STEEL 

dustrial  machine  for  making  and  marketing  steel,  it  had  no 
equal  either  in  Europe  or  the  United  States,  And  at  the  top 
of  this  mammoth  structure  of  commercial  feudalism  stood 
three  men  who  had  been  moneyless  clerks  less  than  two-score 
years  before.  In  the  short  span  of  a  single  lifetime  they  had 
made  themselves  the  masters  of  a  wealth  so  great  that  it  sur- 
passed all  the  hereditary  fortunes  swollen  by  centuries  of  priv- 
ilege. 

THE  DANGERS  OF  THE  STEEL  INDUSTRY 

It  must  not  be  inferred  from  this  romance  of  easily  won 
wealth  that  every  steel-works  is  a  gold  mine.  Far  from  it. 
Few  industries,  if  any,  have  been  as  hazardous,  as  variable, 
as  full  of  whims  and  sudden  changes.  Mr.  Carnegie  loves 
to  quote  the  lines  of  "Hudibras": 

Ah,  me!     What  perils  do  environ 
The  man  who  meddles  with  cold  iron ! 

A  steel-mill  requires  more  varieties  of  skill  than  almost  any 
other  industry.  The  work  is  complex  at  every  step,  and  one 
mistake  may  mean  wreckage.  The  first  owners  of  the  Home- 
stead plant  failed  because  they  lacked  one  species  of  skill  only 
— the  skill  to  manage  the  workmen.  The  first  owners  of  Du- 
quesne  had  an  almost  perfect  plant,  but  failed  to  make  profit- 
able sales.  In  the  eighties,  when  the  Carnegie  company  was 
making  forty  per  cent.,  a  body  of  English  capitalists  spent  a 
million  dollars  on  the  Victoria  furnace  at  Goshen,  Virginia, 
and  failed  completely  through  bad  management.  The  same 
furnace  is  running  full  blast  to-day,  pouring  out  fifty  thousand 
tons  a  year. 

Even  the  largest  steel  corporations  have  had  their  serious 
troubles.  The  Cambria  plant  was  twice  in  difficulties,  and 
once  sold  by  the  sheriff.  The  Joliet  works  was  sold  at  auction. 

122 


CARNEGIE   COMPANY   UNDER   FRICK 

The  Bethlehem  company  was  twice  compelled  to  mortgage 
its  plant.  The  Chicago  steel-works  was  mortgaged  and  its 
shares  sold  at  fifty  cents  on  the  dollar.  The  Troy  Iron  &  Steel 
Company  was  reorganised  several  times.  The  Superior  Iron 
Company's  shares  dropped  to  less  than  sixteen.  On  several 
occasions  the  Carnegie  company  had  to  squeeze  through  such 
narrow  channels  that  some  of  the  frightened  partners  leaped 
overboard.  Many  a  time  Carnegie  had  to  call  a  halt  in  some 
department  that  was  losing  money.  In  1887,  for  instance, 
there  was  a  loss  of  a  hundred  and  fifty  thousand  dollars  on 
one  order  for  armour-plate.  Four-fifths  of  the  plates  had 
been  rejected. 

"  Take  no  more  orders,"  telegraphed  Carnegie. 

Soon  afterward  his  partners  took  an  order  at  an  advance  of 
twenty-two  dollars  a  ton  and  made  large  profits. 

In  his  earlier  days  Mr.  Carnegie  appeared  to  have  no 
clearly  defined  policy;  but  he  learned  by  mistakes,  and  never 
made  the  same  mistake  twice.  On  one  occasion  he  and  Pull- 
man, of  Chicago,  were  talking  over  their  early  days. 

"  Andrew,"  said  Pullman,  "  the  fellows  that  knew  us  in  those 
days  said  we  were  making  mistakes." 

"  So  we  were,"  responded  Carnegie,  "  but  the  percentage 
was  on  our  side." 

Carnegie  was  always  teachable,  and  large  enough  to  as- 
sociate himself  with  men  who  had  the  qualities  which  he 
lacked.  To  paraphrase  Marcus  Aurelius,  he  might  well  de- 
clare: 

"  To  my  brother  Thomas  I  owe  my  appreciation  of  the  value 
large  and  venturesome  business  operations. 

"  To  my  brother  Thomas  I  owe  my  appreciation  of  the  value 
of  friendship  in  business  affairs. 

"  From  John  Vandervort  I  learned  to  value  travel  and  play. 

"  From  Andrew  Kloman  I  learned  the  profitableness  of 
iron. 

123 


THE   ROMANCE   OF  STEEL 

"  From  Henry  Phipps  I  learned  the  necessity  of  patiently 
mastering  details. 

"  From  Captain  W.  R.  Jones  I  learned  to  appreciate  intelli- 
gent and  free-spirited  workmen  and  superintendents." 

And  so  on.  If  this  list  of  instructors  were  made  complete, 
it  would  fill  several  pages.  With  the  exception  of  Frick,  Car- 
negie's later  associates  were  mainly  energetic  young  men  who 
were  content  to  be  part  of  the  Carnegie  machine.  When  com- 
pelled to  choose  between  ability  and  faithfulness,  he  has  in- 
variably chosen  the  latter.  His  motto  has  generally  been, 
"  Better  have  an  obedient  young  mediocrity  than  a  mature 
genius  who  is  self-willed  and  disloyal."  But  in  most  cases  he 
gave  a  free  hand  to  every  man  who  produced  results. 


THE   CARNEGIE    SYSTEM 

Little  by  little  what  we  may  call  the  Carnegie  system  was 
developed.  Roughly  speaking,  Mr.  Carnegie  was  the  first 
steel-maker  who  introduced  department-store  principles  into 
the  iron  and  steel  business.  His  corporation  was  a  large  estab- 
lishment run  by  a  few  highly  skilled  superintendents,  and  by 
a  crowd  of  young  clerks  who  were  taught  to  do  one  thing 
fairly  well.  Partnerships  were  dangled  before  the  eyes  of 
these  young  clerks  until  they  were  fevered  with  ambition.  It 
was  a  system  of  make  or  break.  Every  young  officer  who 
served  under  General  Carnegie  was  either  a  millionaire  or  a 
physical  wreck  in  a  few  years.  "  No  system  has  ever  made  so 
many  men  wealthy  in  so  short  a  time,"  says  Jeans,  the  steel 
historian  of  England. 

Carnegie  made  every  moment  of  the  working  day  important. 
Every  job  was  a  race.  In  the  selling  of  his  steel  he  hamstrung 
competition  by  a  high  tariff  and  a  rail  pool;  but  in  the  making 
of  the  steel  he  stimulated  competition  almost  to  the  point  of 
ferocity.  Every  superintendent  was  pitted  against  every  other. 
The  heaven  of  a  partnership  and  the  hell  of  dismissal  goaded 

124 


CARNEGIE    COMPANY   UNDER   FRICK 

the  bosses  and  sub-bosses  into  a  furious  activity  that  put  the 
Carnegie  company  far  in  advance  of  all  its  competitors.  No 
matter  how  much  the  sweltering  furnacemen  toiled,  no  matter 
how  amazing  was  the  achievement  of  to-day,  to-morrow  the 
same  order  come  from  the  terrible  general — "  More!" 

But  it  was  a  Napoleonic  republic,  this  Carnegie  corporation. 
Every  private  soldier  felt  that  he  carried  the  baton  of  a  mar- 
shal in  his  knapsack,  and  the  soldiers  enjoyed  the  race  as  much 
as  their  general  did.  Never  before,  in  so  prosperous  a  busi- 
ness, were  there  so  few  stupid  relatives  and  favourites  in  places 
of  authority.  Out  of  thirty-three  superintendents,  only  three 
were  school-trained.  The  others  had  risen  from  the  ranks. 
Not  one  had  invested  a  dollar,  yet  all  held  stock.  They  were 
the  "  fittest"  who  survived.  There  were  no  figurehead  direc- 
tors. Every  man  had  his  work,  and  he  held  his  place  just  as 
long  as  he  could  do  the  work  better  than  any  one  else.  The 
moment  a  man  showed  signs  of  weakness  or  inefficiency,  he  was 
immediately  transferred,  or  pigeonholed  into  some  political 
office.  There  was  a  scrap-heap  for  men  as  well  as  for  ma- 
chinery. 

"  Take  away  all  our  factories,"  said  Carnegie  in  an  eloquent 
moment,  "  take  away  all  our  trade,  our  avenues  of  transpor- 
tation, our  money.  Leave  us  nothing  but  our  organisation,  and 
in  four  years  we  shall  have  re-established  ourselves." 

He  imprinted  this  idea  indelibly  upon  the  mind  of  an  Eng- 
lish editor  on  one  occasion.  The  editor  had  asked  him  to 
write  an  article  on  "  Organisation  in  Business." 

"  Yes,"  replied  Carnegie,  "  I  can  write  you  an  article  on 
that  subject,  but  my  price  may  be  too  high  for  you." 

"  Oh,  that  will  be  all  right,"  said  the  delighted  editor. 
"Name  your  own  price,  Mr.  Carnegie." 

"  Well,  I  couldn't  let  you  have  it  at  less  than  the  knowledge 
has  cost  me,  could  I?"  responded  the  steel  king.  "  Suppose 
we  say  five  million  dollars,  which  will  be  very  much  less  than 
cost  I" 

125 


THE   ROMANCE   OF   STEEL 

CARNEGIE  AS  A   BUSINESS   MAN 

Andrew  Carnegie  was  never  a  speculator,  seldom  a  pioneer. 
He  had  millions  for  improvement,  but  not  a  cent  for  a  gamble. 
He  never  bought  or  sold  a  share  of  stock  through  a  stock  ex- 
change. The  moment  Wall  Street  stepped  in  he  stepped  out. 

"  Speculation  is  the  counterfeit  of  business,"  he  says.  "  It 
is  a  parasite  which  feeds  upon  values,  and  creates  none." 

Much  of  his  commercial  daring  was  more  apparent  than 
real.  Generally,  he  waited  until  a  new  invention  had  been 
thoroughly  tested  by  other  men;  then,  if  it  was  satisfactory,  he 
rushed  in  with  a  vigour  and  vim  that  caused  the  outside  world 
to  regard  him  as  the  original  pioneer.  This  occurred  in  the 
making  of  iron  bridges,  Bessemer  steel,  open-hearth  steel, 
structural  iron,  and  in  the  owning  of  Lake  Superior  ore  lands. 
Others  did  the  exploring  and  cut  the  first  paths;  then  Car- 
negie transformed  the  rough  paths  into  wide,  smooth  roads. 

No  business  man  ever  scattered  his  interests  so  widely  at 
first,  nor  concentrated  them  so  completely  as  Soon  as  he  had 
established  himself,  as  Andrew  Carnegie.  After  1873  there 
was  nothing  in  the  world  for  him  but  steel.  Almost  every  rich 
American  who  has  made  his  fortune  in  industry  has  shifted 
his  capital  into  railroad,  bank,  or  real  estate  investments,  for 
the  sake  of  security  and  social  standing.  To  this  rule  Mr. 
Carnegie  is  the  most  notable  exception.  He  became,  and  he 
remains,  the  greatest  of  all  steel  capitalists. 

Year  after  year  the  bulk  of  his  profits  went  back  into  the 
business.  No  alluring  scheme  could  side-track  him.  No  per- 
suasive company-promoter  could  make  the  slightest  impression 
upon  his  armour-plated  indifference.  And  he  inspired  the 
same  spirit  of  concentration  in  his  partners. 

"  I  would  no  more  have  thought  of  buying  stocks  than  of 
flying,"  said  Clemson,  one  of  the  young  partners.  "  If  any  one 
of  us  had  dickered  with  stocks,  I'm  sure  Carnegie  would  have 
discharged  him." 

126 


CARNEGIE    COMPANY    UNDER    FRICK 

Carnegie  never  impoverished  his  business  by  squeezing  out 
of  it  the  highest  possible  dividends.  Not  one  of  his  steel-mills 
was  allowed  to  go  begging. 

Carnegie's  unwavering  policy  was  to  fertilise  the  soil  from 
which  his  millions  grew.  He  pushed  past  failures  with  the 
brute  force  of  capital.  In  dull  times  he  spent  the  money  he 
had  made  in  good  times,  repairing,  improving,  and  enlarging 
his  works.  During  the  stagnant  year  of  1876  he  ordered  a  new 
big  furnace  built  at  the  Edgar  Thomson  works,  to  the  sur- 
prise of  Pittsburghers. 

"  Carnegie  must  have  faith  in  the  future,"  wrote  a  puzzled 
editor. 

At  every  yearly  meeting  of  the  partners,  Mr.  Carnegie  asked 
the  question: 

"Well,  what  shall  we  throw  away  this  year?" 

He  was  the  first  steel-maker  to  throw  good  machinery  on 
the  scrap-heap  merely  because  it  was  a  little  out  of  date. 

"  If  I  could  reduce  the  cost  of  rails  ten  cents  a  ton,  I'd 
spend  a  million  dollars  gladly,"  he  said  to  his  friend  Miller. 

At  one  Saturday  noon  meeting  of  the  Carnegie  directors 
on  January  7,  1899,  in  less  than  thirty  minutes  the  immense 
sum  of  two  million  five  hundred  and  thirty-three  thousand 
dollars  was  voted  to  be  spent  on  improvements.  In  two  years 
twenty  millions  were  expended. 

"  I  gave  Thomas  a  quarter  of  a  million  for  his  patents,  and 
as  there  was  some  little  indefiniteness  about  one  point  in  the 
contract,  I  gave  him  fifty  thousand  more,"  said  Carnegie  airily 
to  the  writer.  Thomas  and  Gilchrist,  two  young  English 
chemists,  were  the  inventors  of  the  "  basic  process,"  by  means 
of  which  steel  could  be  made  from  ores  that  were  high  in 
phosphorus.  "  Those  two  young  men  did  more  for  England's 
greatness  than  all  her  kings  and  queens  put  together,"  said  he. 
"  Moses  struck  the  rock  and  brought  forth  water,  but  they 
struck  the  useless  phosphorus  ore  and  transformed  it  into 
steel — a  greater  miracle." 


THE   ROMANCE   OF   STEEL 

When  the  pioneers  had  demonstrated  the  value  of  chemistry 
to  the  iron  and  steel  industry,  Carnegie  brought  Dr.  Fricke 
from  Germany  to  be  the  company's  chemist.  The  other  steel 
men  said,  "  We  cannot  afford  to  pay  salaries  to  German  scien- 
tists." But  Carnegie  replied,  "  We  cannot  afford  to  be  without 
them." 

Before  the  first  year  was  out,  Dr.  Fricke  had  earned  his 
salary  over  and  over  again,  by  enabling  the  company  to  use 
ores  that  were  considered  by  steel  men  to  be  unavailable. 

PROFITABLE   PUBLICITY 

And  while  his  partners  and  forty-five  thousand  swarthy 
workmen  laboured  on  under  the  blackened  skies  of  Pennsyl- 
vania, Carnegie  himself  was  waging  a  politico-social  cam- 
paign in  all  parts  of  the  world.  He  became  the  personal  friend 
of  every  political  leader  of  national  prominence.  He  was 
always  ready  to  subscribe  to  a  worthy  campaign  fund. 

Congressmen  were  invited  to  select  theatre  parties,  or  to 
dinners  at  which  they  met  literary  and  philosophical  celebri- 
ties. Titled  Europeans  were  taken  to  see  the  wonders  of 
Homestead  or  Duquesne.  Speeches  were  made  and  books 
were  written. 

All  this  was  publicity.  It  was  the  most  effective  sort  of  ad- 
vertising. It  was  an  essential  part  of  the  Carnegie  system. 
There  was  nothing  sordid  about  it.  The  simple  fact  was  shown 
that  a  man  of  many  friends  and  many  interests  is  more  likely 
to  succeed  in  business  than  a  man  of  few  friends  and  few  in- 
terests. More  things  than  kissing  go  by  favour,  and  on  several 
occasions  the  friendly  offices  of  the  government  enabled  the 
Carnegie  company  to  collect  debts  or  secure  orders. 

Every  sales  agent  imitated  his  chief  on  a  smaller  scale.  He 
was  ordered  to  join  the  most  fashionable  clubs,  to  subscribe 
generously  to  all  popular  causes,  arid  to  keep  himself  favour- 

128 


HENRY    W.    OLIVER 


CARNEGIE    COMPANY   UNDER   FRICK 

ably  in  the  public  eye.  "  Big  contracts  are  always  more  likely 
to  be  made  over  nuts  and  wine  than  across  a  desk,"  said  Mr. 
Carnegie.  When  Millard  Hunsiker  was  sent  to  get  orders 
from  Japan,  for  instance,  he  went  in  a  blaze  of  military  glory 
and  social  prestige.  Hunsiker  was  a  tall,  well-built  man,  the 
Beau  Brummel  of  the  Carnegie  company.  A  few  months  be- 
fore sailing  he  secured  an  appointment  as  colonel  on  the  Gov- 
ernor of  Pennsylvania's  staff.  This  gave  him  a  right  to  a  title 
and  to  a  uniform,  both  of  which  proved  astonishingly  effective 
in  smoothing  his  path  in  Tokio  and  Yokohama.  The  Asiatic 
mind  was  doubly  impressed  by  his  prices  and  his  full  regi- 
mentals, and  he  was  soon  cabling  back  to  Pittsburgh  the  most 
satisfactory  orders  for  steel  rails  and  armour-plate.  To-day 
Colonel  Hunsiker  is  in  charge  of  the  London  office  of  the 
United  States  Steel  Corporation,  and  deserves  a  large  share  of 
credit  for  its  exports  of  more  than  a  million  tons  a  year. 

LARGE   SCHEMES  AND   SMALL  DETAILS 

The  daily  report  from  every  department  was  a  strong  fea- 
ture of  the  Carnegie  system.  It  made  the  yesterdays  into  a 
whip  of  many  lashes  to  urge  to-day  on  to  still  greater  speed. 
It  transformed  the  iron  and  steel  business  from  a  monthly  to 
a  daily  affair.  Instead  of  being  an  absentee  employer,  Car- 
negie became  practically  ubiquitous  by  means  of  these  reports. 

"  We  always  felt  as  if  he  were  right  behind  us,"  said  one  of 
his  younger  partners. 

Without  the  use  of  any  spy  system,  he  often  surprised  his 
superintendents  by  knowing  more  about  their  department  than 
they  did.  On  one  occasion  the  superintendent  at  Homestead 
made  a  mistake  in  calculating  the  cost  of  some  improvements. 
The  work  when  done  cost  a  hundred  thousand  dollars  more 
than  his  estimate.  Thinking  that  this  might  escape  Carnegie's 
notice  he  avoided  any  mention  of  it  at  the  next  stockholders' 

129 


THE   ROMANCE   OF   STEEL 

meeting.  The  meeting  concluded  and  Carnegie  showed  no 
sign  that  he  was  aware  of  the  superintendent's  blunder,  not 
wishing  to  humiliate  him  in  the  presence  of  the  others.  But 
as  the  superintendent  was  about  to  leave  the  room,  Carnegie 
took  him  by  the  arm  and  said  quietly: 

"  By  the  way,  Charlie,  what  about  that  extra  expense  in  your 
mill?" 

Everything  on  a  large  scale — quantity,  quantity,  quantity 
— this  was  the  keynote  of  the  system.  Customers  looking  for 
small  lots  might  go  elsewhere  and  welcome.  So  might  those 
who  wanted  steel  of  unusual  shape  or  quality.  The  Carnegie 
company  waged  a  stubborn  battle  with  the  architects  of  bridges 
and  skyscrapers,  to  compel  them  to  standardise  their  material. 
According  to  the  British  and  German  custom,  every  architect 
at  first  designed  all  manner  of  unique  and  artistic  structures, 
which  the  steel-makers  were  supposed  to  reproduce.  In  the 
early  eighties  architects  knew  little  or  nothing  of  steel,  or  of 
the  limitations  of  a  rolling-mill.  Moreover,  the  idea  of  buy- 
ing bridges  by  the  yard  and  buildings  by  the  story  threatened 
both  the  prestige  and  profit  of  their  profession.  So  they  fought 
the  Carnegie  plan  of  making  structural  steel  into  standard 
sizes,  and  lost,  as  every  profession  must  that  puts  its  own  con- 
venience against  the  onward  march  of  the  world.  To-day,  if 
a  builder  orders  a  special  size,  the  steel  company  will  say: 

"  We  don't  make  that  size,  but  if  you'll  pay  three  thousand 
dollars  for  a  new  set  of  rolls,  and  give  us  a  big  order,  we'll 
make  'em  for  you.  Otherwise,  we  shall  have  to  ask  you  to 
select  from  our  catalogue." 

With  all  his  caution  in  new  departures,  it  may  fairly  be  said 
that  Andrew  Carnegie  was  as  a  rule  about  ten  years  ahead  of 
Pittsburgh.  The  average  citizen  regarded  him  as  a  reckless 
plunger.  Most  Pittsburgh  steel-makers  in  their  hearts  con- 
sidered him  an  impertinent  outsider,  who  had  blundered  into 
their  world  bj  accident,  and  who  would  soon  find  his  level 

130 


CARNEGIE    COMPANY   UNDER    FRICK 

again  in  a  railroad  clerkship.  Even  now  his  success  is  looked 
upon  by  many  as  having  been  an  industrial  miracle,  a  phe- 
nomenon which  can  never  occur  again. 

The  older  men  remember  when  he  was  the  biggest  bor- 
rower in  Pennsylvania.  He  bought  everything  he  needed, 
even  when  he  had  to  borrow  the  money  to  do  it.  Again  and 
again,  when  his  fellow  steel-makers  were  scrambling  to  get 
out  of  their  hazardous  business  into  something  "  safe,"  such  as 
real  estate,  or  banking,  or  railroads,  Carnegie  deliberately 
staked  his  whole  winnings  upon  the  future  of  steel.  He  never 
bought  a  foot  of  land  nor  a  share  of  stock  except  in  the  build- 
ing up  of  his  own  business. 

Pittsburgh  has  moved  ahead,  but  it  is  always  the  same  dis- 
tance behind  Carnegie.  In  1898,  at  a  Chamber  of  Commerce 
banquet  there,  the  steel  king  said: 

"  If  I  were  Czar  of  Pittsburgh  I  would  buy  a  large  tract 
of  coal  land  as  near  by  as  possible,  and  give  the  city  a  municipal 
gas  plant." 

That  was  eight  years  ago,  yet  the  leading  citizens  and  Cham- 
ber of  Commerce  officials  still  refer  with  amused  unbelief  to 
"  Mr.  Carnegie's  Utopian  plan,"  and  all  the  while  they  are 
paying  a  double  price  for  illuminating  gas  to  a  private 
company. 

HAND   LABOUR   AND    MACHINERY 

The  year  1892  marked  a  turning-point,  both  in  the  history 
of  the  Carnegie  company  and  the  iron  and  steel  world.  The 
long  war  between  labour  and  machinery  ended  in  a  complete 
victory  for  machinery.  Since  1892  labour  has  been  a  passive 
factor  in  the  steel  business,  without  a  will  or  a  voice  with  re- 
gard to  the  sale  of  itself.  The  era  of  machinery,  which  had 
begun  about  1870  with  the  Bessemer  converter  and  the  im- 
proved rolling  mill,  became  supreme  with  the  failure  of  the 


THE   ROMANCE   OF   STEEL 

Homestead  strike.  In  the  long  history  of  labour  wars  there 
was  never  one  as  bitter  as  this,  nor  one  in  which  the  real  issue 
was  so  completely  overlooked  by  the  general  public. 

The  Homestead  strike  was  not  a  matter  of  wages,  or  hours, 
or  conditions  of  employment.  It  was  not  a  duel  between  Frick 
and  the  Amalgamated  Association  of  Iron  and  Steel  Workers. 
It  was  not  a  struggle  between  individuals  or  organisations, 
It  was  much  more.  It  was  a  conflict  between  the  old  way  and 
the  new  way — between  the  production  by  muscle  and  sweat 
and  production  by  automatic  machinery. 

Before  the  decisive  battle  of  Homestead  the  workmen  had 
names;  after  it  they  had  numbers.  Especially  in  the  earlier 
days  of  the  puddlers,  when  iron  was  refined  by  strong  arms 
and  skilful  hands,  the  labour  union  was  a  power.  Its  officials 
went  to  Congress  on  tariff-raising  expeditions  in  the  same 
Pullman  car  with  the  steel  barons.  They  had  to  be  consulted 
with  regard  to  improvements,  as  well  as  with  regard  to  mat- 
ters of  hours  and  wages.  In  the  steel-mill  the  chief  roller, 
invariably  a  man  of  force  and  skill,  was  the  king-pin  of  the 
whole  plant.  He  stood  practically  above  both  employers  and 
workmen. 

But  after  the  Waterloo  of  Homestead  the  union  official  be- 
came as  extinct  as  the  dodo,  and  the  "  high  roller  "  was  brought 
low.  Henceforth  the  iron-worker  of  the  stage,  brawny,  deep- 
chested,  and  defiant,  became  an  almost  unknown  type.  In  his 
place  stood  a  narrow-chested,  pale-faced  young  man,  or  a 
stolid  Slav,  pushing  buttons  or  pulling  levers. 

Captain  Jones — who,  strangely  enough,  was  more  respon- 
sible for  the  dawn  of  the  era  of  machinery  than  any  other  one 
man — came  into  close  personal  touch  with  his  workmen,  and 
tolerated  the  unions. 

"  I  have  always  found  it  best  to  treat  men  well,"  he  said. 
"  They  should  be  made  to  feel  that  the  company  is  interested 
in  their  welfare.  Make  the  works  a  pleasant  place  for  them. 

132 


CARNEGIE   COMPANY   UNDER    FRICK 

All  haughty  and  disdainful  treatment  of  men  has  a  decidedly 
bad  effect  on  them." 

In  his  day  the  question  of  labour  was  of  first  importance. 
Success  or  failure  depended  upon  whether  the  workmen  were 
willing  or  unruly.  Captain  Jones  went  so  far  as  to  draw  up  a 
labour  formula,  which  he  gave  to  the  Carnegie  company. 

"  We  must  steer  clear  of  the  West,"  he  said,  "  where  men 
are  accustomed  to  infernally  high  wages.  We  must  steer 
clear,  as  far  as  we  can,  of  Englishmen,  who  are  great  sticklers 
for  high  wages,  small  production,  and  strikes.  My  experience 
has  shown  that  Germans,  Irish,  Swedes,  and  what  I  denom- 
inate Buckwheats — young  American  country  boys — judiciously 
mixed,  make  the  most  effective  and  tractable  force  you  can 
find.  Scotchmen  do  very  well,  are  honest  and  faithful.  Welsh 
can  be  used  in  limited  numbers.  But  mark  me,  Englishmen 
have  been  the  worst  class  of  men  I  have  had  anything  to  do 
with." 

To  an  old-timer  like  David  Thomas,  an  iron-works  was 
a  school  as  well  as  a  money-making  enterprise.  Men,  as  well 
as  iron,  were  to  be  refined.  It  was  even  more  important  to 
get  a  high  grade  of  men  than  to  dig  a  high  grade  of  ore. 
Every  workman  was  studied  and  trained  so  far  as  his  natural 
ability  would  permit.  He  was  regarded  by  his  employer, 
not  as  a  mere  automatic  unit  of  energy,  but  as  a  human  being 
with  likes,  dislikes,  and  possibilities. 

When  John  Fritz  first  took  charge  of  the  Bethlehem  works, 
for  instance,  the  sub-bosses  said  to  him: 

"  Now,  the  first  thing  to  do  is  to  fire  Parry." 

"What's  the  matter  with  Parry?"  inquired  Fritz. 

"Oh,  he's  one  of  our  best  furnacemen,"  replied  the  sub- 
bosses,  "  but  he  keeps  the  whole  works  in  a  state  of  turmoil. 
No  living  man  can  get  along  writh  him." 

"Well,  we'll  see  later  about  Parry,"  said  Fritz.  "At 
present  I've  neither  friends  to  reward  nor  enemies  to  punish." 


THE   ROMANCE   OF   STEEL 

In  a  couple  of  days,  Parry,  an  able  but  crotchety  fellow, 
strode  into  Mr.  Fritz's  office. 

"  See  here,  Mr.  Fritz,"  he  said,  "  I've  got  a  new  idea  for 
the  furnace." 

"  Good,  Parry,"  replied  Fritz ;  "  take  this  sheet  of  paper 
and  show  me  what  it  is." 

Parry  made  a  clumsy  drawing,  but  Fritz  saw  at  once  that 
while  the  idea  was  crude,  it  was  new,  and  could  be  improved. 

"It  looks  like  a  fine  idea,  Parry,"  he  said;  "give  me  a 
couple  of  days  to  think  it  over." 

Parry  went  back  to  his  furnace  highly  pleased  with  the 
new  superintendent,  and  Fritz  altered  the  original  suggestion 
until  it  became  workable. 

"  I  find  your  invention  is  a  good  thing,"  reported  Fritz. 
"You  can  go  ahead  and  have  it  done." 

After  this  the  aggressive  Parry  became  one  of  the  most 
tractable  men  in  the  works.  The  incident  illustrates  the  close 
personal  relation  that  existed  between  master  and  man  before 
machinery  came  between  them. 

THE  AMALGAMATED   ASSOCIATION 

In  such  conditions  the  labour  unions  flourished.  A  few 
years  before  the  Civil  War,  when  the  price  of  bar  iron  had 
jumped  to  eight  cents  a  pound,  the  United  Sons  of  Vulcan 
was  organised,  and  in  1865  employers  and  workmen  met  for 
the  first  time  in  Pittsburgh  to  make  a  wage  contract.  Ten 
years  later  the  Amalgamated  Association  of  Iron  and  Steel 
Workers  was  formed,  and  soon  claimed  eighty  thousand 
members.  All  through  the  eighties  it  held  its  men  together 
and  wielded  great  power.  Even  employers  admit  that  it  did 
useful  work  for  the  whole  trade.  It  equalised  conditions 
and  steadied  business. 

But  as  the  use  of  machinery  increased,  the  labour  unions 


CARNEGIE   COMPANY   UNDER   FRICK 

became  intolerable,  from  the  employers'  point  of  view.  They 
had  based  wages  upon  output,  and  as  machinery  increased 
the  output,  they  demanded  that  wages  should  be  raised 
accordingly. 

"The  profits  of  machinery  should  go  to  capital,"  said  the 
employers,  "  because  it  is  capital  and  not  labour  that  has  paid 
for  the  machinery." 

The  workmen,  on  the  other  hand,  being  accustomed  to 
measure  a  day's  work  by  the  amount  of  iron  and  steel  that 
they  produced,  felt  that  they  were  being  robbed  of  their  right- 
ful dues  when  they  compared  their  pay-envelopes  with  their 
output. 

The  old  trade  union  motto,  "Lafctr  creates  all  wealth," 
was  passing  out  of  date  in  the  steel-mills.  For  example,  in 
one  of  Carnegie's  new  mills,  three  thousand  workmen  made 
as  much  steel  as  ten  thousand  could  have  made  a  few  years 
before.  A  wire  rod  roller  in  1882  got  two  dtllars  and  twelve 
cents  a  ton;  to-day  he  gets  twelve  cents  $nly,  yet  his  wages 
are  higher  now  than  formerly.  If  he  were  paid  at  the  old 
rate  to-day,  he  would  make  more  than  four  hundred  dol- 
lars a  week.  A  century  ago,  when  iron  was  made  by  labour 
alone,  all  the  forty-four  furnaces  in  Pennsylvania  produced 
no  more  iron  in  a  year  than  the  nine  Edgar  Thomson  fur- 
naces can  make  now  in  a  week.  Two  centuries  ago,  a  fur- 
nace that  made  four  hundred  tons  a  year  was  prosperous; 
to-day  a  furnace  makes  about  eight  hundred  tons  per  man 
per  year.  Such  has  been  the  extraordinary  shrinkage  of  labour 
as  a  factor  in  the  production  of  iron  and  steel. 

For  several  years  before  the  Homestead  strike  it  was  seen 
by  employers  that  the  Amalgamated  Association  would  have 
to  adapt  itself  to  the  new  conditions  or  be  broken  up.  But 
the  association  was  strong  and  obstinate,  and  they  were  afraid 
of  it.  B.  F.  Jones,  steel  baron  and  apostle  of  high  tarifT,  dared 
not  fight  the  association  because  of  the  danger  to  his  political 

i35 


THE   ROMANCE   OF   STEEL 

prestige.  Andrew  Carnegie  dared  not  for  fear  of  loss  to  his 
general  reputation  as  a  philanthropist  and  friend  of  labour. 
Yet  both  Jones  and  Carnegie  were  anxious  to  go  to  its  funeral. 
Happily  for  them,  at  the  right  time  came  the  right  man  to 
do  the  work — a  man  who  was  unhampered  by  social  or  politi- 
cal prestige,  who  was  in  himself  the  incarnation  of  the  new 
period  of  machinery  and  organisation. 

"  It  was  a  question,"  said  Frick,  "  as  to  which  should  man- 
age the  works — the  proprietors  or  the  workmen." 

THE  GREAT  HOMESTEAD  STRIKE 

The  immediate  causj^of  the  strike  was  trivial.  It  involved 
only  three  hundred  and  twenty-five  out  of  the  thirty-eight 
hundred  men;  and  the  tragic  nature  of  the  five  months'  strug- 
gle, upon  which  the  greater  part  of  the  public  attention  has 
been  concentrate^,  was  trivial  in  comparison  with  the  real  issue 
which  it  decided.  • 

As  this  is  a  story  of  money  and  the  men  who  got  it,  it  is 
not  necessary  to  retell  the  battle  of  Homestead.  The  main 
fact  to  remember  about  the  downfall  of  the  Amalgamated 
Association  is  that  it  was  broken  to  pieces,  not  by  Henry  C. 
Frick,  but  by  the  inventor  and  the  chemist.  It  was  a  pud- 
dlers'  organisation  that  had  outlived  the  trade  of  puddling.  It 
went  down  because  it  had  its  face  to  the  past.  It  was  practi- 
cally a  labour  feudalism,  in  which  a  small  number  of  high- 
waged  workmen  ruled  a  dues-paying  mob  of  low-wage 
workmen. 

"The  Amalgamated  Association  was  putting  a  tax  on 
improvements,  and  it  had  to  go,"  says  Lovejoy,  who  acted 
as  Frick's  chief  aide-de-camp. 

As  so  often  happens  with  labour  organisations,  the  Amal- 
gamated was  again  and  again  sacrificed  by  leaders  who  de- 
veloped political  ambitions.  Its  presidents  were  bagged,  one 

136 


CARNEGIE   COMPANY   UNDER    FRICK 

after  another,  by  political  bosses.  Joseph  Bishop,  its  first 
president,  was  given  a  State  House  job  in  Columbus,  Ohio. 
William  Weihe  became  an  immigration  judge  at  Ellis  Island. 
M.  M.  Garland  was  made  surveyor  of  the  port  at  Pittsburgh. 
Miles  Humphreys  entered  the  Pittsburgh  fire  department  as 
chief.  John  Jarrett  became  a  high  tariff  orator  in  the  famous 
tin-plate  campaign.  All  five  were  men  of  character  and  abil- 
ity, but  they  forsook  the  organisation  that  had  chosen  them 
as  its  leaders. 

Since  the  Homestead  defeat,  the  steel  trade  has  been  prac- 
tically unorganised.  To-day  the  Amalgamated  has  not  more 
than  ten  thousand  members.  There  is  not  a  union  steel-mill 
in  the  United  States.  Frick  made  the  fight,  but  all  steel- 
makers shared  in  the  spoils  of  victory.  Capital  was  set  free 
for  the  first  time  to  make  sweeping  improvements. 

"  A  few  months  after  the  strike  was  ended,"  said  Mr.  Frick 
to  the  writer,  "  we  put  machinery  in  the  beam-yard  that  dis- 
placed four  hundred  men." 

Whether  labour  has  suffered  in  the  long  run  is  still  a  matter 
of  bitter  debate. 

"  After  all,"  said  one  of  the  ex-presidents  of  the  Amalga- 
mated, "  there  are  more  men  employed  in  the  iron  and  steel 
trade  to-day  than  ever  before,  and  the  work  is  easier." 

The  more  machinery,  the  more  workmen,  has  been  the 
rule.  Machinery  means  cheaper  steel;  cheaper  steel  means 
more  uses  and  a  greater  demand.  From  the  social  point 
of  view,  the  fifty-year  fight  against  machinery  made  by  the 
workmen  was  in  every  way  a  blunder. 

THE   FACTS  ABOUT  THE   STRIKE 

Now  that  the  smoke  of  the  battle  has  cleared  away,  the 
facts  may  be  told  without  prejudice  or  passion.  It  should 
be  stated,  in  the  first  place,  that  the  workmen  of  Homestead 
were  not  lawless  rioters.  No  more  orderly  community  could 

i37 


THE   ROMANCE   OF   STEEL 

have  been  found  than  Homestead,  before  and  after  the  Pink- 
erton  invasion.  In  six  months  previous  to  the  strike  there 
had  been  but  three  arrests,  and  those  for  drunkenness  only. 
There  are  no  people  so  law-abiding  that  they  cannot  be 
irritated  into  violence,  and  Homestead  felt  itself  to  be  in  a 
state  of  siege.  Stories  were  told  about  the  shooting  of  strikers 
by  Pinkertons,  hired  by  Frick,  in  the  coke  regions.  The 
workmen  had  a  conviction,  almost  a  religious  belief,  that 
no  outsiders  had  a  right  to  come  in  and  take  their  places  during 
a  strike.  Andrew  Carnegie  himself  had  said,  a  few  years 
before: 

"There  is  an  unwritten  law  among  the  best  workmen, 
'  Thou  shalt  not  take  thy  neighbour's  job.'  " 

A  Presidential  election  was  at  hand,  and  the  partisan  howl- 
ing of  politicians  made  cool  reasoning  impossible.  Demo- 
cratic editors  were  shrieking  that  "  Slavery  had  its  Legree, 
Protection  its  Frick."  Free-trade  propagandists  stood  behind 
the  strikers  and  cheered  them  on  to  the  bitterest  resistance. 
Every  incident  was  exaggerated.  It  was  not  the  loss  of  life 
which  attracted  attention,  but  rather  the  dramatic  and  politi- 
cal nature  of  the  struggle.  Twice  the  damage  has  been  done 
in  other  strikes  of  which  the  public  has  heard  comparatively 
little. 

While  the  question  was  not  in  reality  one  of  wages,  but  of 
authority,  the  immense  profits  of  the  Carnegie  company  were 
held  to  be  sufficient  reason  why  it  should  surrender  to  the 
workmen.  On  the  day  before  the  Homestead  mills  were 
closed,  all  the  Carnegie  properties  were  organised  into  the 
Carnegie  Steel  Company,  capitalised  at  twenty  million  dol- 
lars— twice  their  previous  capitalisation.  "  Millions  for  them, 
and  Pinkertons  for  us,"  said  the  workmen. 

Grover  Cleveland,  who,  as  many  think,  owed  his  first  elec- 
tion to  the  Homestead  strike,  became  the  spokesman  of  the 
strikers  when  he  said : 

138 


CARNEGIE    COMPANY   UNDER    PRICK 

"  Scenes  are  enacted  in  the  very  abiding-place  of  high  pro- 
tection that  mock  the  hopes  of  toil  and  demonstrate  the  falsity 
that  protection  is  a  boon  to  toilers." 

And  so  the  violence  that  occurred  at  Homestead  was  prac- 
tically predestinated  by  a  series  of  circumstances  outside  and 
inside  of  the  steel  business. 


CARNEGIE   AND    FRICK   AS    EMPLOYERS 

In  the  second  place,  it  should  be  stated  that  neither  Car- 
negie nor  Prick  was  unfair  or  oppressive  as  an  employer. 

"  Carnegie  was  always  the  first  to  sign  the  scale,"  said  a 
veteran  unionist. 

"  He  was  the  best  employer  in  the  world,"  said  Thomas  N. 
Miller.  'There  was  not  a  mean  bone  in  his  body  when  it 
came  to  paying  his  men.  His  idea  of  retrenchment  was  not 
to  order  a  reduction  of  wages,  but  to  cut  out  middlemen,  buy 
better  machinery,  and  goad  managers.  Most  of  the  early  iron 
and  steel  men  were  hard  and  close-fisted;  but  Carnegie  was 
always  both  just  and  generous.  In  fact,  his  idea  was  that 
the  workmen  should  receive  all  the  profit  of  their  work  just 
as  soon  as  they  showed  themselves  competent  to  take  charge 
of  the  business." 

Carnegie  had  been  an  employer  for  twenty-six  years,  and 
had  never  had  a  serious  dispute  with  his  men.  He  had  a 
knack  of  going  over  the  heads  of  walking  delegates  and  reach- 
ing the  rank  and  file.  He  was  the  "  little  boss."  He  knew 
hundreds  of  his  workmen  by  name,  and  their  affection  for 
him  was  increased  by  his  cheery  friendliness. 

His  partners,  Mr.  Phipps  informs  me,  thought  that  he  was 
too  yielding  to  the  labour  unions.  They  rejoiced  that  he  was 
in  Scotland  when  the  Homestead  clash  occurred,  and  when 
he  cabled  that  he  would  start  for  Pittsburgh  by  the  next 
steamer,  they  begged  him  to  stay  away. 

i39 


THE   ROMANCE   OF   STEEL 

"The  welfare  of  the  company,"  said  Mr,  Phipps,  "  required 
that  Mr.  Carnegie  should  not  be  in  this  country,  because  he 
was  always  disposed  to  grant  the  demands  of  labour,  however 
unreasonable." 

As  a  keen  man  of  business,  Carnegie  knew  that  it  was  fool- 
ish to  hire  Pinkertons  and  strike-breakers.  Green  hands  are 
useless  in  a  steel-mill,  and  skilled  men  are  scarce.  Better 
wait  six  months  than  ruin  the  whole  plant.  He  knew  human 
nature  better  than  Frick  did.  To  him  labour  meant  living 
people,  not  a  mere  productive  force. 

"  It  is  subjecting  men  to  too  great  a  strain,"  he  said,  "  to 
stand  by  and  see  their  places  filled  by  outsiders." 

Neither  was  Frick  a  labour-crusher,  at  any  period  of  his 
career.  He  never  opposed  unions  that  would  make  and  keep 
contracts,  and  permit  him  to  introduce  improvements.  He 
was  always  approachable,  and  ready  to  hear  a  grievance. 
His  first  order,  when  the  strike  began  was: 

"  Don't  let  the  women  and  children  suffer." 

The  lowest  wages  paid  at  Homestead  were  a  dollar  and 
forty  cents  for  ten  hours'  work;  the  highest  were  twelve  dol- 
lars for  eight  hours.  The  average  pay  of  a  roller  was  about 
eight  dollars  a  day.  Stories  are  told  of  rollers  who  made 
seventy-five  and  even  a  hundred  dollars  a  day,  when  the 
improved  machinery  was  first  introduced.  During  the  strike 
two  mill-workers,  who  gave  bail  for  a  prisoner,  were  found 
to  possess  twenty-five  thousand  dollars'  worth  of  real  estate 
between  them.  Hugh  O'Donnell,  the  leader  of  the  strike, 
owned  a  three-thousand-dollar  residence,  comfortably  fur- 
nished. 

For  the  work  done  by  a  roller,  eight  dollars  a  day  was 
fair  pay.  His  position  was  a  responsible  one.  Success  de- 
pended largely  upon  his  judgment.  At  that  time  a  roller  had 
from  fifteen  to  twenty  men  under  him,  so  that  he  was  an  offi- 
cer and  not  a  private  soldier  in  the  army  of  steel  workers. 

140 


CHARLES    M.    SCHWAB 


OF  THE 

UNIVERSITY 

OF 


CARNEGIE    COMPANY   UNDER   FRICK 

Carnegie  had  every  reason  to  believe  that  he  was  paying  fair 
wages.  Indeed,  no  other  employer  was  paying  so  high  a 
rate. 

If  Carnegie  had  been  on  the  spot,  the  strike  might  still 
have  occurred.  Indeed,  it  had  to  come.  But  his  way  of  set- 
tling it  would  have  been  to  shut  down  and  wait  until  the  men 
surrendered.  He  would  not  have  forced  matters  by  sending 
Pinkertons  and  non-unionists  to  Homestead.  He  would  have 
shown  more  patience  and  diplomacy  than  Frick. 

HOMESTEAD   AFTER  THE   STRIKE 

After  the  strike  the  Homestead  mills  opened  as  non-union, 
Charles  M.  Schwab  undertook  the  difficult  job  of  superin- 
tendent, and  the  vast  six-million-dollar  plant  was  soon  run- 
ning as  smoothly  as  a  watch.  Jones  &  Laughlin,  who  owned 
the  second  largest  steel-works  in  Pittsburgh,  soon  after 
declared  their  mills  to  be  non-union.  The  era  of  machinery 
was  in  full  swing. 

Frick,  Schwab,  and  Dinkey  now  proceeded  to  make  Home- 
stead one  of  the  world's  wonders.  Julian  Kennedy  had 
already  made  it  the  best  plant  of  its  kind;  but  it  was  now  per- 
fected into  a  vast  organic  whole,  as  automatic  and  continuous 
as  brains  and  millions  could  make  it.  For  centuries  the  great 
iron  pillar  at  Delhi,  in  India,  had  been  regarded  as  the  most 
wonderful  iron  product  of  the  human  race.  It  weighed 
seventeen  tons.  How  it  was  made  had  been  an  age-long 
mystery.  But  here  in  a  young  republic,  in  a  spot  that  had 
been  a  wilderness  a  hundred  years  before,  immense  white-hot 
ingots  of  steel,  each  one  five  or  six  times  heavier  than  the 
Delhi  pillar,  were  being  flicked  about  as  though  they  were 
cakes  of  soap.  Here  the  molten  metal  was  not  carried  in 
hand-dippers  by  sweating  slaves,  but  in  steel  tank-cars  hauled 
by  locomotives.  Here  the  power  that  moved  the  wheels  and 

141 


THE   ROMANCE   OF   STEEL 

lifted  the  burdens  was  not  a  thousand  half-naked  labourers  at 
the  end  of  a  rope,  but  the  omnipotence  of  electricity  at  the 
end  of  a  wire.  Here  there  was  the  touch  of  a  button,  not  the 
crack  of  a  whip. 

In  Homestead  fact  has  beaten  fancy.  The  mechanic  has 
outdone  the  poet.  American  days  surpass  the  Arabian  Nights. 
It  is  the  dream  of  Archimedes  come  true.  The  tropical  imag- 
ination of  the  East  told  of  a  flying  carpet  that  could  lift  and 
carry  one  or  two  people  from  place  to  place;  but  it  could  not 
conceive  of  the  hand  of  a  boy  raising  at  once  the  whole  popu- 
lation of  a  country.  Yet  at  the  Homestead  works  there  is  a 
hydraulic  press  which  has  power  to  lift  up  all  the  people  in 
the  State  of  Idaho.  Compared  to  it,  the  hammer  of  Thor  was 
a  baby's  plaything. 

THE    ERA    OF   MACHINERY 

To  describe  all  the  processes  in  this  amazing  era  of  machin- 
ery would  fill  an  encyclopaedia;  but  here,  for  instance,  is  the 
story  of  a  steel  rail,  made  at  the  Edgar  Thomson  Steel  Works. 
Starting  at  the  ore  yards,  we  see  a  vast  pile  of  ore  containing, 
perhaps,  half  a  million  tons.  Near  by  are  the  bins  for  the 
coke  and  limestone.  Properly  mixed  these  three  materials 
go  in  a  continuous  stream  of  cars  to  a  row  of  eleven  big  fur- 
naces. The  furnaces  are  insatiable  monsters.  They  must  be 
fed  with  ten  tons  every  minute. 

Every  little  while  the  furnaces  are  "  tapped,"  and  the 
molten  iron  flows  into  a  train  of  small  cars,  which  hurries  off 
to  the  great  mixer.  This  is  a  steel  box  on  rockers.  The  cars 
are  emptied  into  the  mixer  which  rocks  up  and  down  till 
the  iron  is  all  of  one  quality.  Then  a  second  train  puffs  up, 
receives  a  load  of  iron,  about  two  hundred  tons,  from  the 
mixer,  and  scurries  away  to  four  Bessemer  converters.  These 
blow  iron  into  steel  at  the  rate  of  four  tons  a  minute. 

142 


CARNEGIE   COMPANY   UNDER   FRICK 

The  converters  spout  their  steel  into  big  ladles,  which  pour 
the  spluttering  fluid  into  moulds,  pushed  into  position  on  a 
third  train.  When  the  moulds  are  filled,  the  train  runs  about 
fifty  yards  away  and  stops.  As  soon  as  the  steel  is  cooled  into 
red-hot  ingots,  they  are  taken  out  and  put  into  gas  ovens  so 
that  they  will  not  become  cold.  From  here,  one  at  a  time, 
they  are  jerked  out  and  dropped  upon  a  small  electric  car, 
which  rushes  them  to  the  rollers  to  be  squeezed  into  shape. 

Back  and  forward  they  plunge  through  the  rolls,  which 
are  operated  very  much  as  is  the  wringer  of  a  laundry.  Every 
time  an  ingot  goes  between  the  rolls  it  becomes  longer  and 
thinner.  Soon  it  looks  like  a  flaming  red  worm,  twisting  and 
squirming  to  escape.  Sparks  splash  from  it  as  it  writhes  and 
springs  savagely  at  the  rolls.  You  notice  that  it  is  now  a  rail. 

In  a  second  it  is  switched  to  another  track,  and  springs  away 
as  if  it  had  succeeded  in  escaping  from  its  tormentors.  If  it 
thinks  so,  it  is  mistaken.  Two  whirling  saws  cut  off  its  ends, 
with  a  sudden  shriek  and  blaze  of  fireworks.  Steel  hands 
grip  it  again  and  fling  it  through  a  cold  rolling-machine,  so 
that  its  surface  may  be  hardened.  Nothing  now  remains 
except  to  straighten  it  and  drill  holes  in  the  ends.  Its  agony 
is  ended. 

No  human  hand  has  touched  it,  from  beginning  to  end. 
The  only  hand  labour  is  the  drilling  of  the  holes.  As  you  fol- 
low it  in  its  course  you  see  very  few  workmen.  Here  and 
there  you  notice  small  switch-towers,  in  which  are  quick-eyed 
men.  There  are  no  swarthy  Samsons.  Most  of  the  men  are 
alert,  but  not  muscular.  The  day  of  brute  force  has  set. 

Here  is  the  secret  of  the  profits.  It  is  not  the  high  tariff 
that  has  brought  the  millions  into  the  steel  treasuries,  although 
the  tariff  was  an  indispensable  aid  up  to  fifteen  years  ago.  It 
is  not  the  exploitation  of  labour,  nor  the  plunder  of  weaker 
capitalists,  nor  the  watering  of  stock.  It  is  not  primarily  the 
possession  of  vast  natural  resources,  as  Europeans  claim.  The 


THE   ROMANCE   OF   STEEL 

secret  of  American  supremacy  in  the  steel  business  is  in  the 
application  of  intelligence  to  every  department.  Here  the 
inventor  is  appreciated.  The  ability  to  invent  and  to  improve 
has  risen  to  the  dignity  of  a  profession.  The  man  who  would 
have  been  a  puddler  fifty  years  ago  is  to-day  probably  a  ma- 
chinist or  an  electrical  expert. 

The  Carnegie  company  swept  past  all  its  competitors  be- 
cause it  laid  hold  of  these  new  forces  of  the  nineteenth  cen- 
tury. It  focussed  the  most  energy  and  the  most  intelligence 
upon  its  business.  It  paid  the  highest  price  for  brains.  It 
hitched  Ambition  and  Enthusiasm  to  its  car.  And,  as  we 
shall  see  in  the  next  chapter,  it  staked  all  its  men  and  all  its 
millions  on  the  future  of  steel,  and  won. 


144 


GEORGE    M.    LAUDER 


CHAPTER  V 

THE  WORKMEN-PARTNERS   OF  ANDREW 

CARNEGIE 

The  Extraordinary  Careers  of  Charles  M.  Schwab  and  the  other  Young  Steel- 
Workers  Who  Stand  To-day  among  Our  American  Steel  Kings — Why 
Carnegie  Put  Inexperienced  Workingmen  in  Command  of  His  Industrial 
Forces — The  Enormous  Profits  which  His  Methods  of  Organisation 
Produced. 

WE  have  now  reached  a  place  in  this  story  where  the 
secret  of  the  Carnegie  millions  is  to  be  more  fully 
explained.     We    shall    discover  by   what   original 
methods  Andrew  Carnegie  built  up  his  wonderful  organisa- 
tion and  outclassed  all  his  competitors. 

As  we  have  seen,  he  was  always  teachable  and  quick  to 
learn.  He  had  a  composite  mind,  shaped  by  innumerable 
influences;  one  of  the  many  good  ideas  which  he  adopted  on 
the  advice  of  Captain  Bill  Jones  was  the  plan  of  giving 
special  rewards  for  special  service.  In  1884  he  greatly 
improved  on  the  captain's  suggestion  by  taking  into  partner- 
ship four  of  his  brightest  young  men — Curry,  Moore,  Boern- 
trager,  and  Abbott.  Three  years  later  this  idea  was  made  part 
of  the  Carnegie  system.  Young  employees  were  presented 
with  stock  and  allowed  to  pay  for  it  out  of  their  dividends. 

In  this  way,  when  Carnegie  found  a  competent  man,  he 
was  able  to  "  grip  him  with  hooks  of  steel,"  and  at  the  same 
time  to  compel  the  most  undeviating  loyalty.  With  the  shar- 
ing of  dividends,  he  kept  his  partners  in  the  traces  pulling 
with  might  and  main.  He  also  made  it  a  rule  that  any  of 
the  younger  partners  could  be  forced  to  resign  by  a  three- 


THE   ROMANCE   OF   STEEL 

fourths  vote,  so  that  there  was  a  whip  to  crack  over  their  heads 
and  keep  them  steady.  As  he  drove  his  four-in-hand  through 
Great  Britain  he  no  doubt  often  thought  of  the  resemblance 
between  it  and  the  swift  forty-in-hand  which  he  was  guiding 
so  cleverly  up  the  steep  and  crooked  road  that  led  to  the 
golden  age. 

"  There  never  was  a  wiser  business  plan,"  says  Clemson, 
one  of  the  young  partners,  "  for  it  spurred  us  all  on  to  do 
our  best  work.  Of  course  we  were  loyal  to  the  man  who  did 
so  much  for  us.  I  would  have  sooner  cut  off  my  right  hand 
than  have  turned  on  Mr.  Carnegie." 

"  Mr.  Carnegie  noticed  the  men  who  stepped  ahead  of  the 
ranks,"  said  Thomas  Morrison.  "  If  any  one  of  us  took  a 
partner's  interest  in  the  business,  he  was  made  a  partner." 

In  the  selection  of  these  partners  there  was  no  system  of 
civil  service  or  step-by-step  promotion.  In  the  opinion  of 
Pittsburgh,  at  least,  they  owed  their  success  largely  to  Car- 
negie's whim.  With  three  exceptions  only,  they  were  from 
the  rank  and  file,  without  any  education  of  a  bookish  sort 
beyond  what  is  given  by  the  public  school.  Carnegie,  like 
Sam  Weller's  father,  could  have  said  of  himself  and  his 
partners: 

"  We  had  the  best  education  any  boys  ever  had.  We  were 
turned  out  in  the  streets  and  made  to  shift  for  ourselves." 

One  of  the  partners  first  came  to  Carnegie's  notice  as  a 
clerk  in  a  linen  store.  Mrs.  Carnegie  wanted  a  certain  make 
of  linen,  which  was  not  in  the  market. 

"  I  can  have  it  made  to  order  for  you,  madam,"  said  the 
obliging  clerk. 

Mrs.  Carnegie  was  pleased.  "I  see  you  are  a  Scotchman," 
she  said. 

"  Yes,  madam,"  he  replied.  "  I  was  born  in  Dunferm- 
line." 

Dunfermline  was  Carnegie's  birthplace — his  Mecca — his 

146 


FRANCIS    T.    F.    LOVEJOY 


WORKMEN-PARTNERS   OF   CARNEGIE 

Holy  City;  and  the  young  clerk  at  once  found  favour  in  his 
eyes.  A  place  was  made  for  the  quick-witted  youth  in  the 
sales  department,  and  before  long  he  was  neck  deep  in  the 
stream  of  gold. 

GeorgeJLauid£rr--whose  share  was  about  seventeen  million 
dollars  when  the  Carnegie  company  was  turned  over  to  the 
United  States  Steel  Corporation,  was  quite  willing  to  tell  me 
of  the  unique  incident  which  brought  him  into  the  business. 

"  It  is  a  curious  fact,"  he  said,  "that  Mr.  Carnegie  invited 
me  to  become  his  partner  because  I  happened  to  know  the 
meaning  of  a  scientific  phrase — '  the  modulus  of  elasticity.' 
He  had  closed  an  order  for  steel  for  the  great  St.  Louis 
bridge,  and  this  phrase  occurred  in  the  contract.  I  explained 
its  meaning,  and  at  once  he  insisted  that  I  should  become 
his  partner." 

"That  story  is  correct,"  said  Carnegie  when  I  brought  it 
to  his  notice.  "  I  didn't  know  what  the  modulus  of  elasticity 
meant;  but  I  knew  enough  to  get  the  contract." 

LAUDER,    THE    "BALANCE-WHEEL" 

Mr.  Lauder,  who  is  to-day  a  rugged-faced  old  man,  with 
a  kindly  smile  and  simple  manners,  gave  his  attention  for 
thirty  years  to  the  ore  and  coke  departments.  In  council  he 
was  moderate  and  cautious,  and  often  acted  as  a  brake  for  his 
more  impulsive  cousin.  Lauder  and  Carnegie  had  been  boys 
together  in  Scotland.  Lauder's  favourite  name  for  Carnegie 
was  "  Neeg,"  and  Carnegie's  favourite  name  for  Lauder  was 
"  Dodd," — a  Scotch  nickname  for  George.  "  Dodd  is  the 
balance-wheel,"  he  would  often  say.  Lauder  was  one  of  the 
few  in  the  company  who  had  received  a  technical  education, 
and  the  younger  men  went  to  him  for  advice. 

"  He  was  a  father  to  us,"  says  Clemson. 

Thomas  Morrison,  like  Lauder,  was  a  relative  of  Carnegie. 

H7 


THE   ROMANCE   OF   STEEL 

He  became  superintendent  of  the  great  Duquesne  works  at 
twenty-nine  years  of  age,  having  started  four  years  before  as 
an  ordinary  machinist.  His  career  was  brilliant,  and  there 
is  no  one  in  Pittsburgh  who  ascribes  it  to  the  mere  fact  of 
relationship  to  Carnegie.  "  Morrison  made  good,"  is  the 
general  opinion. 

"  When  he  came  to  Pittsburgh  he  told  no  one  that  he  was 
a  relative  of  mine,"  said  Carnegie.  "  I  discovered  him  one 
day  by  accident,  after  he  had  worked  his  way  up." 

A.  C.  DINKEY  AND  F.  T.  F.  LOVEJOY 

A.  C.  Dinkey,  whose  sister  married  Charles  M.  Schwab,  is 
also  generally  classed  as  one  who  has  proved  worthy  of  all  his 
honours.  His  mother  was  left  a  poor  widow  with  several 
small  children.  She  was  very  ambitious  for  their  future  and, 
leaving  the  little  village  where  they  were  born,  brought  them 
to  Braddock  so  that  the  two  boys  could  work  in  the  steel-mills. 
Young  Alva  Dinkey  is  remembered  by  the  older  steel-workers 
of  Braddock  as  a  bright,  round-faced  boy  who  carried  water 
for  the  furnace-men  and  was  always  asking  questions.  At 
sixteen  he  learned  telegraphy  at  a  little  station  near  Brad- 
dock.  Then  he  began  at  the  bottom  of  the  ladder  in  a  machine 
shop,  worked  his  way  up  and  left  to  learn  the  trade  of  an 
electrician.  Every  change  meant  a  drop  in  wages,  but  a 
gain  in  knowledge.  Entering  the  Homestead  works  as  a 
clerk,  he  introduced  electrical  machinery  on  a  large  scale. 
At  twenty-six  he  became  general  superintendent  of  Home- 
stead, with  ten  thousand  men  under  his  command. 

Francis  T.  F.  Lovejoy,  unlike  Dinkey,  spent  the  first 
twenty-seven  years  of  his  life  knocking  about  from  failure  to 
failure.  He  was  by  turns  stenographer,  telegrapher,  book- 
keeper, reporter,  oil  workman,  and  driver  of  a  laundry 
wagon.  Then  he  got  a  clerkship  with  the  Carnegie  company, 

148 


THOMAS    MORRISON 


WORKMEN-PARTNERS   OF   CARNEGIE 

and  developed  into  a  most  industrious  and  accurate  auditor. 
He  laboured  night  and  day.  During  the  Homestead  strike  he 
went  through  a  fiery  ordeal.  Every  charge  against  the  strik- 
ers was  signed  by  him,  making  him  for  the  time  very  unpopu- 
lar. His  career  divides  naturally  into  decades — at  seventeen 
he  left  home  as  a  moneyless  boy;  at  twenty-seven  he  became 
a  Carnegie  employee;  at  thirty-seven  he  was  admitted  to  part- 
nership ;  and  at  forty-seven  he  awoke  one  morning  to  find 
himself  one  of  the  multimillionaires  of  Pittsburgh. 


FROM    STEEL-MAN   TO    DIPLOMAT 

Another  romantic  career  was  that  of  John  G.  A.  Leishman, 
now  United  States  Minister  at  Constantinople.  He  was 
undersized,  and  when  he  got  his  first  job  as  office-boy  in  an 
iron-works  at  the  age  of  ten,  he  looked  as  if  he  had  escaped 
from  a  kindergarten.  In  his  teens  he  was  -promoted  to  be  a 
"  mud-clerk,"  having  an  office  in  a  little  shanty  on  the  river- 
bank,  and  attending  to  the  unloading  of  barges.  After  saving 
a  little  money  he  started  a  small  furnace,  but  was  soon  brought 
to  a  standstill. 

Next  he  came  to  view  as  a  broker  in  iron  and  steel.  He 
was  smart,  diplomatic,  and  a  good  salesman.  Carnegie 
noticed  him  and  gave  him  a  position.  At  that  time  Captain 
Bill  Jones  was  booming  the  production  of  steel  rails,  and  to 
Leishman  was  assigned  the  task  of  securing  the  big  orders. 
Before  many  years  he  was  president  of  the  company;  but  was 
not  permitted  to  hold  the  office  for  many  months.  President 
McKinley  offered  him  the  position  of  Minister  to  Switzer- 
land; and  he  bade  good-bye  to  steel-making.  Since  then  he 
has  been  a  member  of  the  diplomatic  corps — rich,  but  not  as 
rich  as  those  who  remained  under  the  smoke  of  Pittsburgh. 

Two  other  partners  who  left  the  company  before  the  grand 
sharing  the  spoils  in  1901  were  W.  L.  Abbott,  who  went 

149 


THE   ROMANCE   OF   STEEL 

out  of  his  own  accord  in  1892,  saying  "  I  have  all  the  money 
I  want";  and  John  A.  Potter,  who  left  with  the  purpose  of 
making  armour-plate  in  Cleveland.  Both  men  had  climbed 
up  from  the  lowest  rungs  of  the  ladder,  Potter  being  superin- 
tendent of  Homestead  at  thirty,  and  Abbott  chairman  of  the 
board  at  thirty-seven.  Abbott  was  one  of  the  few  for  whom 
mere  money-making  had  no  fascination.  At  forty  he  retired 
to  enjoy  the  pleasures  of  travel,  books,  and  friendship,  and 
apparently  has  no  regrets  at  having  missed  a  few  superfluous 
millions. 

"  I  left  before  the  melon  was  cut,"  he  says. 

Abbott's  chief  contribution  to  the  success  of  the  Carnegie 
company  was  the  organisation  of  its  unequalled  system  of  sales 
agencies.  In  1884,  when  he  was  chairman  of  the  board,  the 
company  had  no  agents  of  its  own.  Its  orders  came  in  from 
commission  men. 

"  This  was  not  satisfactory,"  says  Abbott,  "  for  the  reason 
that  a  commission  man  makes  deals  with  both  sides.  We 
decided  that  it  would  pay  to  send  out  salaried  men  who  would 
work  first  and  last  for  the  Carnegie  company." 

THE    CARNEGIE    SALES    AGENCIES 

The  new  plan  soon  flooded  the  company  with  orders. 
Those  who  made  the  largest  sales  were  taken  into  the  com- 
pany as  partners,  the  first  three  being  John  C.  Fleming,  J. 
O.  Hoffman,  and  Charles  W.  Baker.  To-day  the  company 
has  sixteen  agents  in  sixteen  American  cities.  Four  times  a 
year  they  meet  in  Pittsburgh  to  compare  notes  and  "  get 
posted."  And  once  a  week  each  agent  gets  a  letter  from  the 
home  office,  keeping  him  up  to  date  in  all  particulars  of  the 
business.  No  body  of  men  did  more  to  pull  the  Carnegie 
company  up  the  long  hill  into  its  golden  age  than  this  little 
band  of  agents,  working  and  scheming  day  and  night  to  gain 
the  prize  of  a  partnership. 

I5Q 


ALVA    C.    DINKEY 


WORKMEN-PARTNERS   OF   CARNEGIE 

One  of  these  agents,  who  perhaps  has  received  more  naive 
enjoyment  from  his  many  millions  than  any  of  his  fellows, 
was  Alexander  Rollin  Peacock.  Mr.  Peacock  served  no 
apprenticeship  in  the  iron  and  steel  business;  but  walked 
directly  into  the  Carnegie  company  from  behind  a  dry-goods 
counter.  He  proved  that  he  could  sell  steel  rails  as  easily  as 
handkerchiefs.  The  two  largest  orders  ever  secured  by  the 
company  were  obtained  by  him — sixty-five  thousand  tons  of 
rails  for  the  Canadian  Pacific  and  sixty-five  thousand  tons  of 
structural  material  to  the  builders  of  the  New  York  Subway. 

There  was  scarcely  one  of  these  forty  partners  whose  life 
was  not  a  repetition  of  the  old  American  romance  of  self- 
help.  Emil  Swensson,  in  1882  working  as  a  bricklayer's 
helper  on  the  Hudson  River  .tunnel,  wras  fourteen  years  after- 
ward the  manager  of  the  great  Keystone  Bridge  Company. 
From  his  brain  sprang  the  steel-hopper  car  and  the  steel 
"  traveller,"  by  means  of  which  a  steel  bridge  can  be  erected 
with  one-third  of  the  time  and  cost.  To  Swensson  is  largely 
due  the  development  of  structural  steel.  He  was  a  maker  of 
bridges,  and  the  first  tall  steel  buildings  were  built  of  bridge 
materials. 

"After  all,"  remarked  Swensson,  "what  is  a  skyscraper 
but  a  bridge  set  on  end?  " 

Homer  J.  Lindsay  and  Henry  P.  Bope  began  by  hammering 
typewriters  in  the  Carnegie  Building,  worked  up  to  the  sales 
department,  placed  big  orders,  and  won  the  favour  of  the 
"  little  boss."  Lewis  T.  Brown  was  a  shearman,  Azor  R. 
Hunt  a  roller,  D.  G.  Kerr  an  apprentice  in  the  laboratory, 
W.  W.  Blackburn  a  clerk  in  a  village  store,  W.  C.  McCaus- 
land  a  messenger-boy,  Daniel  M.  Clemson,  a  helper  in  a 
blacksmith  shop,  and  so  forth.  Clemson  entered  Carnegie's 
employ  as  a  labourer,  and  in  a  few  years  was  advanced  until 
he  ranked  as  the  admiral  of  the  ore  fleet  and  colonel  of  the 
natural  gas  regiment 

iTwo  other  shirt-sleeve  partners  who  missed  tHe  cutting  o| 

151 


THE   ROMANCE   OF   STEEL 

the  melon  were  P.  T.  Berg  and  Henry  William  Boerntrager. 
Berg  was  a  Swedish  mechanical  genius,  who  worked  wonders 
at  the  Homestead  steel-mills.  Whenever  one  of  his  new 
improvements  was  being  discussed,  Carnegie  would  usually 
say: 

"  If  Berg  designed  it,  that's  all  I  want  to  know.  It's  bound 
to  go." 

Long  before  the  golden  age  arrived,  Berg  concluded  that 
he  had  made  as  much  money  as  he  would  ever  need,  and 
went  back  to  his  beloved  Sweden  to  spend  it. 

Boerntrager,  too,  was  a  mechanical  marvel,  but  from  Ger- 
many. He  had  left  his  native  land  to  escape  military  service. 
He  was  fond  of  telling  the  story  of  his  flight. 

"One  day,"  he  would  say,  "just  before  I  was  twenty-one, 
I  said  to  myself,  *  William,  in  a  few  months  you'll  be  taken 
for  the  army.  You'll  lose  the  best  years  of  your  life.  If 
you  don't  run  away  at  once,  you  are  lost.' ' 

A    STEEL-MILL    STATESMAN 

The  next  day  he  started  for  America.  His  first  job  in  Pitts- 
burgh was  as  stoker  to  a  small  engine.  Then  he  became  a 
labourer  in  a  Carnegie  steel-mill  at  thirty  dollars  a  month,  and 
worked  up  until,  at  twenty-eight,  he  was  the  general  manager 
of  the  Kloman  mill.  When  he  died  he  was  worth  a  million. 

Boerntrager  was  one  of  those  men  who  might  properly  be 
called  a  steel-mill  statesman.  He  was  in  his  element  when  he 
was  surrounded  by  men  and  machinery.  His  mill  was  his 
pride.  To  see  every  department  working  smoothly  gave  him 
the  same  pleasure  that  an  orchestra  conductor  feels  when  his 
players  are  in  perfect  accord.  He  was  a  real  leader  of  work- 
men, and,  like  Captain  Jones  and  Schwab,  though  to  a  lesser 
degree,  he  attached  his  men  to  him.  Whenever  he  was  in 
command,  the  costs  were  pulled  down  and  new  records  made. 

152 


AZOR   R.    HUNT 


WORKMEN-PARTNERS   OF   CARNEGIE 

It  was  such  men  as  Boerntrager  that  made  forty-per-cent. 
profits  possible  in  the  steel  trade. 

"  Boerntrager  had  one  speech,"  said  Mr.  Carnegie.  "  It 
was  short  and  straight  to  the  point.  '  Gentlemens,'  said  he, 
'what  we  want  is  this — get  prices  up,  and  costs  down;  and 
every  man  must  stand  on  his  own  legs.' ' 

His  mind  was  so  centred  upon  his  work  that  he  could  not 
talk  upon  any  subject  without  using  the  language  of  the  steel- 
mill.  For  instance,  soon  after  his  marriage  to  a  most  estima- 
ble lady  of  short  stature,  Carnegie  met  him  in  the  offices  and 
offered  congratulations. 

"Did  you  get  a  perfect  wife,  William?"  he  asked. 

"Veil,  Mr.  Carnegie,"  replied  Boerntrager,  "maybe  she 
might  have  been  improved  if  she  had  got  von  more  pass  troo 
de  rolls." 

Another  man  who  helped  to  make  forty  per  cent,  possible 
was  H.  M.  Curry,  who  practically  worked  himself  to  death. 

"  I  have  known  him  to  stay  by  a  job  for  forty-eight  hours 
at  a  stretch,"  said  James  Scott.  Curry  was  a  man  of  the  highest 
honour  as  well  as  a  record-breaking  expert,  and  was  greatly 
esteemed  in  Pittsburgh. 

The  young  partner  who  first  put  the  Carnegie  company's 
books  in  order  was  S.  E.  Moore.  He  was  dropped  long 
before  the  days  of  affluence  began,  and  Lovejoy,  the  former 
laundryman,  became  his  successor.  Millard  F.  Hunsiker  was 
the  first  salaried  tester  of  the  company.  This  was  a  new 
position  and  a  new  idea.  The'  custom  had  been  for  eve'ry 
buyer  to  send  his  own  tester  to  the  steel-mill;  but  Carnegie 
placed  Hunsiker  as  the  official  tester  of  the  company's  mills. 
Hunsiker  had  a  high  reputation  as  an  expert,  and  was  after- 
ward selected  as  the  partner  who  was  best  fitted  to  open  up 
the  foreign  market.  He  was  consequently  a  pioneer  in  two 
important  departments. 

This  policy  of  making  generals  out  of  inexperienced  pri- 

J53 


THE   ROMANCE   OF  STEEL 

vate  soldiers  was  distinctively  Carnegian.  Other  Pittsburgh 
employers  regarded  it  as  revolutionary  and  dangerous  in  the 
highest  degree.  It  was  a  radical  wiping  out  of  all  the  old- 
fashioned  ideas  of  apprenticeship.  Smooth-faced  boys  were 
put  in  command  over  grey-haired  veterans.  Enthusiasm 
received  the  honours  that  had  invariably  gone  to  experience. 
The  older  men  commented  bitterly  on  this  policy,  and  said 
that  Carnegie  was  turning  the  industrial  world  upside  down. 
But  Carnegie,  being  generally  four  thousand  miles  away,  con- 
tinued to  put  his  army  of  twenty  thousand  workmen  in  charge 
of  its  drummer-boys.  Whether  this  policy  was  correct  or  not 
theoretically,  it  worked  better  than  any  other  plan  of  leader- 
ship that  had  ever  been  tried  in  the  iron  and  steel  business. 

No  doubt,  when  this  story  of  the  Carnegie  methods  is  read 
in  Europe,  it  may  seem  incredible.  This  flouting  of  book 
knowledge,  this  contempt  for  the  college  and  the  historian, 
should  have  led  to  wreck  and  ruin,  according  to  all  the  theo- 
rists. On  one  occasion,  Herr  Wittgenstein,  the  Frick  of  Aus- 
tria, was  present  at  a  meeting  of  Carnegie  superintendents. 
Twenty  or  more  were  gathered  around  the  long  table. 

"I  suppose,  Mr.  Schwab,"  said  the  Austrian,  "that  most 
of  these  men  have  received  a  technical  education?" 

"  Only  three  of  them  had  any  training,"  replied  Schwab. 
"  All  the  others  rose  from  the  ranks,  as  I  did." 

As  a  matter  of  fact,  a  technical  education  was  of  little  value 
in  those  pioneer  days.  There  were  few  books,  if  any,  on  the 
new  methods  of  making  cheap  steel.  The  past  history  of  the 
business  was  mainly  a  record  of  mistakes  and  failures.  From 
the  standpoint  of  the  old  steel-makers  and  the  college  men, 
Carnegie  and  his  young  partners  were  constantly  trying  to 
do  what  was  impossible.  The  amazing  fact  was  that  in  at 
least  half  of  their  wild  plunges  toward  the  goal,  they  suc- 
ceeded. They  gained  ground,  held  it,  and  plunged  again. 


154 


D.    G.    KERR 


WORKMEN-PARTNERS   OF   CARNEGIE 

STEPS   IN   RISE   OF  C.    M.    SCHWAB 

The  most  brilliant  of  all  the  young  partners  was  Charles 
M.  Schwab.  His  was  the  most  meteoric  career  ever  known 
in  the  steel  business.  He  had  risen  step  by  step — but  such 
steps! 

Step  number  one — driving  stakes  for  a  dollar  a  day  at  the 
Edgar  Thomson  works. 

Step  number  two,  six  months  later — superintendent  of  the 
Edgar  Thomson  works,  the  foremost  steel-making  plant  in 
the  world. 

Step  number  three — at  thirty  years  of  age  superintendent  of 
both  the  Edgar  Thomson  and  Homestead  plants,  managing 
eight  thousand  workmen.  This  was  the  only  instance  in  which 
Carnegie  permitted  one  man  to  operate  two  plants. 

Step  number  four — president  of  the  Carnegie  Steel  Com- 
pany, with  a  White  House  salary  and  three  per  cent  of  the 
stock. 

Step  number  five — president  of  the  United  States  Steel 
Corporation,  with  twenty-eight  million  dollars'  worth  (par 
value)  of  its  stock,  and  a  salary  of  a  hundred  thousand  dollars 
a  year.  In  1901  he  sat  on  the  apex  of  the  towering  steel 
pyramid — the  victor  among  two  hundred  thousand  competi- 
tors— at  thirty-nine  years  of  age. 

"  The  first  time  I  saw  Schwab,"  said  Mr.  Long,  a  former 
president  of  the  Pittsburgh  Stock  Exchange,  "  he  was  a  bare- 
footed boy  at  Loretto,  a  mountain  hamlet  near  Altoona.  The 
next  time  I  saw  him  he  was  in  his  hundred-thousand-dollar 
private  car." 

Schwab's  father  kept  one  of  the  village  stores,  and  Charlie 
drove  the  rickety  stage  between  the  village  and  Cresson  sta- 
tion. It  was  a  poor  plank  road  at  that  time,  but  he  has  had 
it  paved  at  his  own  expense  since  then.  Those  who  remember 
him  say  that  he  was  the  happiest  boy  in  the  village — laugh- 

155 


THE   ROMANCE   OF   STEEL 

ing,  whistling,  singing,  cracking  his  whip.  His  nicknames 
were  "Dolly  Varden"  and  "Smiling  Charlie."  The  drum- 
mers told  him  stories  and  made  fun  of  his  flaming  red  neck- 
ties. No  one  looked  less  like  an  embryonic  steel  king  than 
Charlie  Schwab. 

By  the  time  he  was  nineteen,  Schwab  had  drifted  away 
from  Loretto,  and  anchored  in  a  Braddock  grocery  store. 
For  wages  he  got  a  five-dollar  bill  every  two  weeks.  One 
evening  he  caught  the  eye  of  Captain  Jones. 

"  Do  you  want  to  change  your  job,  young  fellow,"  asked 
Jones. 

"Yes,  sir!"  responded  Schwab. 

"What  are  you  willing  to  do?" 

"Anything,"  replied  the  smiling  young  clerk. 

"Well,"  said  Jones,  "come  around  to-morrow  morning 
and  I'll  give  you  a  dollar  a  day  to  hammer  stakes." 

This  was  the  beginning  of  a  friendship  that  lasted  until 
the  tragic  death  of  Captain  Jones.  Schwab  at  once  showed 
a  natural  talent  for  mechanics,  and  from  Jones,  who  was  with- 
out a  peer  as  a  leader  of  workmen,  he  learned  to  manage  men. 

SCHWAB'S  WORK  AT  HOMESTEAD 

After  the  death  of  his  teacher,  the  heaviest  burden  of  the 
Carnegie  company  fell  on  the  shoulders  of  Schwab.  It  was 
he  who  reconstructed  the  Homestead  works  from  the  debris 
of  the  great  strike;  who  created  the  profitable  armour-plate 
department;  who  originated  the  Saturday  meetings  of  super- 
intendents. With  cheerful  self-assurance,  he  accepted  any 
responsibility  that  was  offered.  Enthusiasm,  he  found,  was 
better  than  experience.  Nothing  daunted  him.  He  swept 
into  the  Golden  Sea  with  all  sails  set  and  the  band  playing. 
Had  he  been  asked  to  reconstruct  the  empire  of  Russia  or  to 
federate  the  South  American  republics,  he  would  have  re- 
plied without  hesitation: 

156 


W.    W.    BLACKBURN 


WORKMEN-PARTNERS   OF   CARNEGIE 

"Yes.  Good  idea!  I'll  attend  to  that  next  week." 
Schwab's  greatest  achievement — the  one  lasting  honour 
which  nothing  can  take  away — was  his  successful  handling  of 
the  Homestead  steel-works  after  the  great  strike.  No  steel- 
maker, before  or  since,  has  ever  had  to  tackle  so  hard  a  job. 
When  Schwab  took  Homestead,  it  was  a  failure.  It  was  a 
four-million-dollar  mistake.  The  machinery  was  not  work- 
ing properly  and  the  men  were  not  working  at  all.  There 
was  a  stupid  rabble  of  strike-breakers,  and  a  sullen,  defeated 
army  of  five  thousand  workmen  to  deal  with.  And  the  whole 
place  had  been  for  five  months  a  battlefield,  passion-swept  and 
blood-stained — the  Waterloo  of  organised  labour. 

WINNING   THE  SURLY  WORKMEN 

Into  this  inferno  of  hate  and  bitterness  came  Schwab,  car- 
ing no  more  for  discouragements  than  a  duck  does  for  a 
drizzle.  Little  by  little  his  "  Hurrah,  boys! "  swung  the  great 
steel-mill  into  action.  He  was  approachable  and  sympathetic, 
yet  always  as  quick  as  lightning  to  turn  everything  to  his 
own  advantage.  Always  fluent  and  plausible,  he  was  never 
at  a  loss  for  a  reason  or  an  inducement.  In  half  a  year  the 
surly  workmen  were  entirely  won  over  by  his  invincible 
optimism  and  perseverance;  and  "Charlie  is  my  darling" 
was  heard  in  Homestead,  instead  of  the  curses  and  rifle-shots 
of  a  few  months  before. 

"  Schwab  is  a  genius  in  the  management  of  men  and 
machinery,"  said  Carnegie,  when  I  asked  him  for  an  estimate 
of  his  young  partner's  work.  "  I  never  saw  a  man  who  could 
grasp  a  new  idea  so  quickly." 

As  soon  as  Carnegie  saw  that  Schwab  had  "  made  good  " 
at  Homestead,  he  made  him  president  of  the  whole  company, 
so  that  not  even  the  masterful  Frick  was  equal  to  him  in 
authority.  This  was  perhaps  the  first  instance  in  which  so 
young  a  man,  absolutely  without  any  business  experience,  was 


THE   ROMANCE   OF   STEEL 

placed  in  command  over  so  great  a  corporation.  He  had 
previously  had  an  offer  of  the  vice-presidency  and  had 
refused  it. 

"  I'm  a  bigger  man  at  the  works,"  he  said. 

There  was  another  young  workman  in  the  Carnegie  com- 
pany who  followed  Schwab  like  a  shadow.  He  was  four 
years  younger,  and  his  name  was  William  Ellis  Corey.  He 
was  as  thoroughly  an  American  as  any  one  can  be,  being  a 
descendant  of  Benijah  Corey,  who  flourished  a  hundred  years 
ago  and  owned  a  farm  of  three  hundred  acres  whose  site  is 
now  covered  by  the  streets  of  New  York. 


ORGANISATION    VERSUS    THE    INDIVIDUAL 

Schwab  and  Corey  had  been  boyhood  friends  in  smoky 
Braddock,  when  one  was  in  a  grocery-store  and  the  other  was 
working  on  a  coal-tipple.  Both  got  dollar-a-day  jobs  from 
the  Carnegie  company  and  worked  up  to  be  superintendents 
at  twenty-one.  Both  married  Braddock  girls.  Both  became 
armour-plate  specialists.  Both  made  reputations  as  "  drivers  " 
and  record-breakers.  Both  moved  up  from  one  presidency 
to  another,  Schwab  being  always  one  move  ahead. 

But  here  the  resemblances  cease.  Schwab,  the  last  of  the 
individualists  of  steel,  put  personality  first  and  organisation 
second.  "  Every  business  grows  around  a  great  individual," 
he  said.  Corey  put  the  organisation  first  and  the  individual 
second. 

To  Schwab  a  workman  was  "Bill,"  or  "Joe,"  or  "Tom." 
To  Corey  he  was  "No.  137." 

Schwab  swayed  his  men  by  sentiment,  by  his  contagious 
enthusiasm,  by  his  personal  knowledge  of  each  man.  Corey 
ruled  by  his  tireless  supervision  and  his  thorough  knowledge 
of  every  department. 

Schwab  was  brilliant,  dramatic,  impulsive.  Corey  was 

158 


WORKMEN-PARTNERS   OF   CARNEGIE 

painstaking,  methodical,  trustworthy.  On  one  of  the  very 
few  occasions  when  he  was  persuaded  to  talk  for  publication, 
he  said: 

"  The  man  who  succeeds  is  the  one  with  bulldog  tenacity — 
who  never  gives  up.  He  is  the  man  who  not  only  does  what 
he  is  told,  but  more." 

Schwab  loves  men  and  the  applause  of  men.  Publicity 
stimulates  him  like  wine.  Corey  is  reserved,  stern-faced,  non- 
magnetic. 

Schwab  is  a  man  of  many  interests.  Even  his  charities  are 
unique.  He  has  built  at  Loretto,  his  birthplace,  a  cathedral 
and  a  monument  to  Prince  Gallitzin,  the  founder  of  the  town. 
To  Braddock  he  has  given  a  church  and  to  Homestead  an 
industrial  school.  At  Richmond  Beach,  New  York,  he  has 
established  schools  in  which  crippled  and  deformed  boys  and 
girls  are  learning  trades.  To  the  tenement  children  of  New 
.York  he  gives  a  thousand  dollars'  worth  of  toys  as  a  Christmas 
present. 

In  his  own  pleasures,  he  loves  display  like  a  child.  His 
New  York  palace  is  rated  on  the  tax-list  as  the  second  highest 
in  cost,  Senator  Clark's  unfinished  mansion  being  first.  With 
land  and  furnishings,  its  value  is  probably  more  than  five 
millions.  Carnegie's  austere  residence  is  a  model  of  sim- 
plicity when  compared  with  Schwab's  ornate  pile  of  cream- 
coloured  granite,  with  its  gobelin  tapestries,  its  music-room 
and  chapel,  its  Flemish  smoking-room,  Louis  Seize  drawing- 
room,  Henri  Quatre  library,  Louis  Quatorze  dining-room, 
and  Louis  Treize  breakfast-room. 

COREY'S  IMPERSONAL  BUSINESS  METHOD 

As  to  where  Corey  lives,  no  one  knows.  The  quiet,  anony- 
mous apartment  hotel  from  which  he  steps  forth  at  twenty 
minutes  past  eight  every  week-day  morning  has  not  yet  been 
discovered  by  the  Sunday  press.  He  may  have  his  philan- 


THE   ROMANCE   OF   STEEL 

thropies,  but  they  are  never  heard  of.  He  has  few  interests, 
if  any,  outside  of  his  office.  Not  only  is  he  the  president  of 
the  biggest  corporation  in  the  world — he  is  part  of  the  mech- 
anism itself.  As  a  Homestead  roller  told  me,  "  Corey  never 
knowed  anything  except  his  own  business."  He  has  sunk 
himself,  his  personal  likes  and  dislikes,  in  the  socialised  steel 
business.  He  feels  himself  to  be  a  fraction,  rather  than  a 
unit.  His  corporation  is  an  organism  like  a  human  body,  and 
he  is  the  co-ordinating  function  of  its  brain. 

Considered  purely  as  a  profit-making  device,  Carnegie's  plan 
of  taking  young  workmen  into  partnership  has  never  been 
beaten.  It  was  his  master-stroke.  By  making  every  superin- 
tendent a  partner,  whose  partnership  depended  upon  con- 
tinued faithfulness  and  record-breaking,  he  built  up  a  work- 
ing force  that  was  absolutely  loyal  as  well  as  efficient.  He 
could  pursue  his  globe-trotting  without  any  fear  of  plots 
or  desertions. 

Not  one  of  the  young  partners  thought  of  balking,  no  mat- 
ter how  vigorously  the  "  little  boss "  swung  the  whip.  All  of 
them  agree  that  he  was  a  hard  driver.  Mr.  Carnegie  himself 
freely  admits  the  charge,  and  gave  me  an  anecdote  to  illus- 
trate it. 

"  On  one  occasion,"  he  said,  "  when  I  was  about  to  sail 
for  Europe,  I  was  saying  good-by  to  a  group  of  my  young 
partners,  and  telling  them  of  the  benefit  which  I  always 
derived  from  an  ocean  voyage. 

" '  You  cannot  imagine  the  relief  I  feel/  said  I,  l  when  the 
ship  leaves  Sandy  Hook  behind  and  I  am  fairly  out  upon 
the  waters  for  a  whole  week's  rest.' 

"'  Yes,  Mr.  Carnegie,'  said  Captain  Jones,  '  and  just  think 
what  a  relief  we  all  get! ' 

"  No  other  man  could  equal  Carnegie  at  sticking  the  knife 
in  and  twisting  it  around  so  as  to  hurt,"  said  one  of  his 
partners. 

160 


D.    M.    CLEMSON 


WORKMEN-PARTNERS   OF   CARNEGIE 

PRAISE  AFTER  BLAME 

A  few  of  them  resented  his  proddings,  but  none  could  deny 
that  they  had  a  good  effect.  Carnegie  was  as  quick  to  give 
praise  as  blame,  and  he  was  always  fair.  If  he  made  a  mis- 
take, he  was  ready  to  admit  it.  In  one  instance,  when  he  had 
written  a  scorching  letter  to  one  of  his  superintendents,  who 
had  taken  an  order  at  too  low  a  price,  the  superintendent 
replied  sharply  and  showed  good  reasons  for  his  action.  Car- 
negie was  convinced,  and  at  once  wrote  to  the  superintendent 
the  following  short  but  sufficient  letter  of  apology: 

DEAR  A ,  I  cave.    A.  C. 

It  was  not  by  chance  that  Carnegie  gave  to  enthusiasm  the 
rewards  that  had  hitherto  gone  to  experience.  No  one  was 
ever  more  sensitive  to  world-changes  than  he.  He  knew  that 
the  age  of  machinery  had  come.  He  knew  that  it  was  more 
important  to  know  what  was  done  yesterday  than  what  was 
done  ten  years  ago.  He  preferred  young  men,  who  raced 
toward  the  future,  to  old  men,  who  stopped  to  look  back  at 
the  past.  To  be  quick — quick — quick,  that  was  the  Carnegian 
policy. 

"The  man  who  starts  first  gets  the  oyster;  the  second  man 
gets  the  shell,"  was  one  of  his  favourite  sayings.  In  one  in- 
stance, when  a  manager  telegraphed  to  Carnegie  the  cheerful 
news  that  he  had  beaten  all  records  in  making  steel,  Carnegie 
replied:  "Congratulations.  Why  not  do  it  every  week?" 

His  aim  was  to  build  up  a  corporation  which  was  as  nearly 
as  possible  like  an  automobile — swift,  reliable,  easily  con- 
trolled, and  as  ready  to  back  as  to  go  ahead.  In  a  world  of 
telegraphs,  cables,  and  daily  newspapers,  the  supreme  neces- 
sity was  to  make  decisions  and  carry  them  into  effect  at  once. 
Again  and  again  Carnegie  stunned  his  partners  by  his  quick 

161 


THE   ROMANCE   OF  STEEL 

changes  of  policy.  It  was  very  disconcerting.  It  pushed 
them  out  of  the  easy  grooves  of  routine.  It  compelled  them 
to  make  new  plans  and  to  destroy  the  old  ones.  If  they  had 
been  men  of  years  and  long  experience,  they  would  have  been 
demoralised  by  this  making  and  breaking  of  plans.  But  they 
were  young,  energetic  and  bound  to  their  chief  by  every  con- 
sideration of  self-interest. 

What  a  modern  steel  king  needs  is  not  an  army  of  skilled 
workmen  who  have  served  long  apprenticeships  at  their  trade. 
First  and  foremost,  he  needs  capital;  and,  secondly,  he  needs 
loyal  and  efficient  superintendents.  To-day  steel  is  made  by 
capital,  not  by  labour — by  machinery,  not  by  muscle.  It  is 
made  by  men  who  are  primarily  financiers.  Ten  thousand 
picked  steel-workers,  without  machinery,  would  be  helpless 
in  the  face  of  modern  competition ;  whereas  a  man  like  Schwab 
could  take  ten  thousand  unskilled  consumptives,  and,  by  an 
outlay  of  thirty  millions,  create  a  first-class  steel-plant  in  a  few 
years. 

IRON-MAKING  IN   DR.   JOHNSON'S  DAY 

A  few  comparisons  will  show  the  astounding  difference  be- 
tween the  steel-making  of  the  good  old  days  and  to-day.  "  At 
an  iron-works  I  saw  round  bars  formed  by  a  notched  hammer 
and  an  anvil,"  wrote  Dr.  Samuel  Johnson  a  hundred  and  thirty 
years  ago.  The  learned  doctor  was  impressed  by  the  ingenuity 
of  the  smith  in  using  a  notched  hammer.  What  would  he 
think  if  he  could  visit  the  young  town  of  Monessen,  near  Pitts- 
burgh, and  see  thirteen  hundred  thousand  pounds  of  iron  rods 
made  in  twenty-four  hours? 

"  George  Anshutz  regarded  forty  tons  a  week  as  magnificent 
work,"  said  George  Anshutz  Berry. 

Anshutz  was  the  first  iron-maker  in  Pittsburgh,  and  Mr. 
Berry,  now  eighty-seven,  is  his  only  living  relative.  But  what 
would  the  old  pioneer  sav  if  he  could  see  a  Pittsburgh  furnace 

162 


WORKMEN-PARTNERS   OF   CARNEGIE 

produce  fifteen  hundred  thousand  tons  of  iron  without  relin- 
ing — as  much  as  the  best  furnace  of  former  days  could  make 
in  seven  hundred  and  fifty  years? 

Ethan  Allen  broke  the  record  in  iron-making  when  he  made 
a  ton  in  less  than  ten  hours.  But  what  would  the  hero  of  Ti- 
conderoga  think  of  his  achievement  if  he  could  watch  the 
flaming  converters  of  Braddock  make  five  tons  of  steel  in  two 
minutes? 

HALF  A  TON  A  SECOND 

"  I  well  remember  when  a  five-hundred-pound  mass  of  iron 
was  thought  to  be  so  heavy  that  the  whole  neighbourhood  gath- 
ered in  to  see  it  rolled,"  said  Charles  Huston,  vice-president 
of  the  Lukens  Iron  and  Steel  Company.  What  would  that 
"  whole  neighbourhood  "  say  if  it  saw  a  steam-hammer  weigh- 
ing a  quarter  of  a  million  pounds  thrown  on  the  scrap-heap 
of  the  Bethlehem  Steel  Company  because  it  was  too  light? 

"  It  takes  me  ten  years  to  sell  ten  tons  of  steel,"  said  a  Phila- 
delphia dealer  in  1750.  If  that  worthy  Quaker  is  still  aware 
of  terrestial  events  he  will  know  that  the  steel  men  of  the 
United  States  are  now  selling  ten  tons  of  steel  every  twenty 
seconds. 

Soon  after  the  close  of  the  Civil  War,  a  Trenton  firm  made 
a  circular  saw  over  seven  feet  in  diameter.  "Enormous!" 
cried  the  steel-makers  of  the  world  when  they  saw  it  at  the 
Paris  Exposition.  What  adjective  would  they  find  suitable 
if  they  could  see  the  piece  of  steel  ribbon  that  was  made  last 
year  by  Henry  Disston  &  Sons,  Philadelphia — fifteen  inches 
wide  and  sixty-seven  yards  long? 

An  English  workman  made  a  dozen  pins  and  called  it  a 
day's  work,  at  the  time  when  Adam  Smith  was  writing  his 
"  Wealth  of  Nations."  To-day  a  census  of  pins  in  the  United 
States  alone  will  show  that  about  twelve  billion  new  pins  are 
made  and  sold  every  year.  A  pocket  rule  at  that  time  was 

163 


THE   ROMANCE   OF   STEEL 

made  by  a  twenty-dollar  plant  and  cost  a  dollar.  Now  it  is 
made  by  a  hundred-thousand-dollar  plant  and  costs  ten  cents. 

"Thirty  years  ago  I  found  only  one  man  in  San  Francisco 
who  could  shoe  my  horse,  and  now  the  San  Franciscans  are 
building  steam-frigates,"  said  General  Sherman  in  a  speech 
delivered  to  a  company  of  steel  men  in  1890. 

The  United  States  had  its  eighth  President  before  it  had  its 
first  steel  plough;  yet  the  American  farmer  of  to-day  is  buying 
steel  waggons  and  steel  bath-tubs.  And  during  President 
Grant's  last  year  of  office,  an  order  for  twelve  tons  of  Bessemer 
steel  was  considered  so  large  that  editorials  were  written  on  it, 
yet  last  year  the  United  States  Steel  Corporation  quietly  ac- 
cepted a  single  order  for  a  million  tons. 

Two  centuries  ago,  roughly  speaking,  Dr.  Higley  was 
making  steel  by  the  ounce  in  an  apparatus  that  he  could  have 
carried  in  a  valise.  One  century  ago  Jonathan  Leonard  was 
making  a  hundred  tons  of  steel  a  year.  To-day  we  are  making  a 
hundred  tons  every  three  minutes.  The  price  of  manufactured 
steel  has  fallen  from  forty  thousand  dollars  a  ton  to  twenty- 
eight.  Instead  of  making  five  pounds  at  a  time,  we  make 
thirty  thousand  pounds,  and  instead  of  a  ten  days'  process,  it 
is  now  a  ten  minutes'  process,  or  less. 

CARNEGIE'S  FIGHT  FOR  SPEED 

What  Carnegie  and  his  young  partners  accomplished  in  the 
matter  of  speed  was  equally  wonderful.  As  we  have  seen,  they 
created  the  "  big  second  "  and  set  a  breakneck  pace  which  their 
competitors  were  obliged  to  follow.  Horace  Greeley  relates 
that  while  on  a  tour  through  the  south  of  France,  he  saw  a 
farmer  cutting  grass  with  a  small  hand-sickle. 

"  Why  don't  you  get  a  scythe?  "  he  asked.  "  Then  you  could 
cut  twice  as  much." 

The  Frenchman  deliberated  for  a  few  moments  upon  this 
new  idea.  Then  he  said : 

164 


WORKMEN-PARTNERS   OF   CARNEGIE 

"  I  don't  see  how  that  could  be  possible,  because  I  haven't 
got  twice  as  much  grass  to  cut." 

The  idea  of  saving  time  or  energy,  or  of  doing  more  than 
a  certain  definite  amount  of  work,  was  too  revolutionary  for 
his  simple  mind  to  comprehend.  But  in  the  American  iron 
and  steel  trade,  from  the  earliest  days,  there  was  a  persistent 
aim  to  do  the  greatest  possible  amount  of  work  with  the  least 
possible  amount  of  labour.  This  "  American  plan  "  began  with 
our  first  great  iron-maker — Joseph  Jenks,  of  Lynn.  In  1648 
he  took  out  the  first  patent  of  which  we  have  any  record.  His 
invention  was  a  water-power  device  for  saving  time  and  labour 
. — "  for  speedy  dispatch  of  much  worke  with  few  hands,"  he 
said,  striking  the  keynote  of  the  iron  and  steel  trade  of  the 
future. 

To-day  the  fight  for  speed  is  practically  won.  "  The  faster 
the  better  "  has  become  almost  an  international  motto.  But  at 
first  the  American  steel-makers  had  to  tunnel  through  a  moun- 
tain of  European  prejudice. 

"Too  fast!  You  can't  make  good  steel  in  ten  minutes," 
said  a  foreign  engineer  to  Charles  S.  Price,  superintendent 
of  the  Cambria  works. 

"  I  told  him,"  said  Price,  "  that  I  would  sooner  make  steel 
in  six  minutes  than  ten." 

Last  year  an  American  salesman  was  trying  to  .sell  a  new 
style  of  lathe  to  a  German  manufacturer. 

"  It  will  do  so  and  so  in  seven  minutes,"  he  said. 

"Nonsense!"  retorted  the  German.  "Why,  that  takes  my 
men  an  hour." 

Finally,  however,  the  German  was  persuaded  to  buy  one  of 
the  lathes.  Several  months  afterward  he  wrote  to  the  maker 
of  the  lathes  and  said: 

"  What  your  man  claimed  was  true.  The  lathe  will  do  that 
work  in  five  minutes." 


165 


THE    ROMANCE   OF   STEEL 

QUICK  WORK  OF  STEEL  MAGICIANS 

The  swift  Schwab  built  two  fifty-ton  open-hearth  furnaces 
at  Homestead  in  sixty  days.  Mayor  Tom  Johnson,  when  he 
was  a  steel-maker,  built  a  ten-mile  street  railway  in  the  same 
length  of  time;  and  completed  his  great  Lorain  steel  plant  in 
forty-two  weeks  after  the  cutting  down  of  the  first  tree — an 
unparalleled  feat.  Still  more  recently,  a  Pittsburgh  company 
put  up  an  immense  steel  building  six  hundred  feet  by  a  hun- 
dred and  twenty-five,  at  Monessen,  in  fifty-seven  days. 

The  magical  quickness  with  which  ore  is  handled  is  the 
wonder  of  foreign  steel  men.  The  ore  which  is  lying  in  the 
wilds  of  Minnesota  on  Monday  morning  is  dug  up,  trans- 
ported a  thousand  miles,  and  made  into  steel  rails  by  Saturday 
night.  One  Duluth  engineer  has  actually  proposed  a  loop- 
the-loop  system  of  unloading  ore-cars — turning  them  upside- 
down  at  the  ore-docks,  so  that  they  might  travel  in  a  continuous 
belt  line  between  the  docks  and  the  mines.  This  is  regarded 
as  a  joke  to-day;  but  it  may  be  a  fact  to-morrow. 

All  this  speed — all  this  machinery — all  this  magnitude  of 
operations,  meant  the  destruction  of  the  small  steel-makers 
and  the  consolidation  of  the  large  ones.  It  meant  the  survival 
of  the  fittest,  and  the  Carnegie  company,  with  its  sagacious 
leader  and  its  devoted  band  of  sub-partners,  was  by  far  the 
fittest  corporation  that  the  nineteenth  century  had  produced. 
Its  semi-automatic  mills,  its  arrangements  for  the  cheap  as- 
sembling of  its  raw  materials,  and  the  zeal  of  its  officers,  made 
it  one  of  the  wonders  of  the  industrial  world. 

From  1875  onward  the  Carnegie  company  was  the  pace- 
maker of  the  steel  trade.  The  story  of  its  profits  will  always 
remain  one  of  the  wonders  of  American  finance  and  manufac- 
turing. Carnegie  became  a  King  Midas.  He  touched  tons  of 
steel  and  transformed  it  into  gold. 

In  1890,  which  was  the  first  of  these  King  Midas  years,  the 

166 


TOM    L.    JOHNSON 


OFTHE 

UNIVERSITY 

OF 


WORKMEN-PARTNERS   OF   CARNEGIE 

net  profit  was  five  and  a  half  million  dollars.  The  cost  of 
steel  rails  at  that  time,  according  to  an  official  investigation 
made  by  Carroll  D.  Wright,  was  eleven  dollars  and  twenty- 
seven  cents  per  ton;  and  the  average  selling  price  during  the 
year  was  thirty-one  dollars  and  seventy-eight  cents.  For  the 
following  five  years  the  profits  fell  off,  being  only  four  million 
dollars  during  the  year  of  the  Homestead  strike,  and  three 
millions  in  1893.  I*1  1898,  although  the  price  of  rails  aver- 
aged seventeen  dollars  and  sixty-two  cents,  the  lowest  figure 
on  record,  the  Carnegie  company  cleared  eleven  and  a  half 
millions.  Such  a  gain  as  this — nearly  a  million  a  month — • 
was  unprecedented.  Carnegie  clapped  his  hands  and  said: 
"  We  shall  beat  that  next  year!  " 


FORTY   MILLION   DOLLARS   A   YEAR 

In  1899  the  Carnegie  bookkeepers  could  scarcely  believe 
their  eyes.  When  the  last  column  of  figures  had  been  added 
they  saw  before  them  a  total  of  twenty-five  and  a  half  million 
dollars.  This  was  more  than  the  capital  stock  of  the  company 
had  been  up  to  the  previous  year.  All  were  satisfied  except 
Carnegie.  As  usual,  this  victory  made  him  eager  for  a  greater 
one.  He  was  sixty-four  years  old,  and  anxious  to  retire  from 
business ;  but  he  wanted  the  last  year  to  be  the  best. 

"  Personally,  I'm  glad  to  have  this  year  (1900)  to  ourselves," 
he  wrote  to  George  Lauder,  "  to  show  what  we  can  do." 

His  company  was  making  a  million  every  two  weeks,  but 
this  was  not  enough.  The  superintendents  were  spurred  up  in 
all  departments.  "More!  More!"  were  the  orders.  The 
whole  mechanism  was  speeded  up,  and  fortune  favoured  the 
brave  by  raising  the  price  of  rails  to  thirty-two  dollars  and 
twenty-nine  cents.  When  the  year  closed,  there  was  forty 
million  dollars  to  divide — the  greatest  amount  ever  earned 
by  any  industrial  corporation  in  legitimate,  competitive  busi- 

167 


THE   ROMANCE   OF   STEEL 

ness.  Carnegie  got  twenty-five  millions;  Phipps,  five  and  a 
half  millions;  Frick,  twenty-six  hundred  thousand;  Lauder,  a 
million  and  three  quarters;  Schwab,  thirteen  hundred  thous- 
and. As  for  the  young  partners,  they  were  well  content  with 
sums  ranging  from  fifty  thousand  to  eight  hundred  and  fifty 
thousand.  The  least  of  them  received  a  Presidential  salary  for 
his  year's  work.  The  Carnegie  company  profits,  from 
1875  to  1900,  were  one  hundred  and  thirty- three  million 
dollars. 

GOOD   MANAGEMENT  THE   SECRET 

"  There's  a  lot  of  profit  in  a  steel  mill,"  admitted  Mr.  Frick. 
But  no  other  steel-mills,  either  in  America  or  Europe,  have 
made  such  a  continuous  series  of  big  dividends  as  these.  Prof- 
its are  not  an  inevitable  result  of  a  high  tariff  and  a  steel- 
mill.  For  instance,  in  a  year  when  Carnegie  made  over  four 
millions,  his  chief  competitor,  the  Illinois  Steel  Company,  lost 
more  than  a  million.  The  following  year  Carnegie  cleared 
more  than  five  millions,  while  the  Illinois  Steel  reported  only 
three  hundred  and  sixty  thousand  dollars.  The  fact  seems  to 
be  that  a  steel-mill  is  a  gold  mine  when  efficiently  managed, 
and  a  sink-hole  for  capital  when  otherwise.  It  is  generally 
agreed  among  steel-makers  that  no  new  improvement  should 
be  installed  unless  there  is  a  prospect  of  getting  back  its  cost 
in  three  years. 

According  to  the  admissions  of  Charles  M.  Schwab  at  this 
time,  there  was  no  longer  any  need  to  protect  the  Carnegie 
company  against  foreign  competition. 

"You  know  we  can  make  rails  for  less  than  twelve  dollars 
a  ton,"  he  wrote  in  a  letter  to  Mr.  Frick  in  1899.  "I  know 
positively  that  England  cannot  produce  pig  iron  at  actual  cost 
for  less  than  eleven  dollars  and  fifty  cents  per  ton,  even  allow- 
ing no  profit  on  raw  materials,  and  cannot  put  the  pig  iron  into 

1 68 


FRANK    B.    SMITH 


WORKMEN-PARTNERS   OF   CARNEGIE 

a  rail  for  less  than  seven  dollars  and  fifty  cents.  This  would 
make  rails  at  net  cost  to  them  of  nineteen  dollars.  We  can 
sell  at  this  price  and  ship  abroad  so  as  to  net  us  sixteen  dollars 
at  works  for  foreign  business,  nearly  as  good  as  home  busi- 
ness has  been.  What  is  true  of  rails  is  equally  true  of  other 
steel  products.  As  a  result  of  this,  we  are  going  to  control  the 
steel  business  of  the  world." 


CARNEGIE  AND   ARMOUR-PLATE 

Since  1892  profits  from  armour-plate  had  greatly  aug- 
mented the  Carnegie  income.  When  he  was  first  asked  to 
make  armour-plate,  in  1890,  Carnegie  flatly  refused.  Soon 
afterward  he  received  a  letter  from  President  Harrison,  urg- 
ing that  it  was  his  duty  to  provide  his  country  with  its  means 
of  defence. 

"  That  settles  it,''  replied  Carnegie.  "  We'll  go  ahead  and 
make  armour-plate."  In  a  few  years  he  had  become  the  rival 
of  Krupp  and  Armstrong.  A  single  contract,  shared  by  the 
Carnegie  and  Bethlehem  companies,  amounted  to  eight  mil- 
lion dollars. 

It  is  undeniable  that  Carnegie's  profits  were  enormous.  But 
it  is  also  true  that  he  gave  more  value  than  he  received.  He 
did  more  than  any  other  individual  to  replace  dear  iron  with 
cheap  steel.  The  fact  that  we  can  buy  as  much  steel  for  ten 
cents  as  our  fathers  bought  for  a  dollar  is  mainly  due  to  him 
and  his  partners.  Carnegie  did  for  the  steel  world  what  street- 
cars have  done  for  transportation;  what  the  ten-cent  magazine 
has  done  for  magazinedom;  what  the  penny  paper  has  done 
for  the  newspaper  business.  Carnegie  did  not  overcharge  his 
generation.  This  would  be  a  story  of  billions,  not  millions, 
if  it  dealt  with  the  amount  saved  by  the  buyers  and  users  of 
steel. 


169 


THE   ROMANCE   OF   STEEL 

A   MEDLEY  OF   OPPOSITES 

Like  all  men  of  comprehensive  natures,  he  was  a  medley 
of  opposites,  or  seemed  so  to  ordinary  men.  He  made  strong 
friends  and  some  enemies.  What  has  been  written  of  him 
has  been  invariably. biassed  either  by  devotion  or  by  dislike. 
Probably  many  incidents  in  his  career  can  best  be  explained 
by  the  fact  that  he  was  sometimes  the  master  of  circumstances, 
and  sometimes  mastered  by  them. 

Absurd  charges  of  blundering  have  been  made  against  him, 
as  if  a  man  could  for  a  third  of  a  century  persistently  blunder 
on  into  fame  and  fortune.  For  thirty-six  years  he  remained 
unshaken  in  the  control  of  his  corporation,  in  the  midst  of  plot 
and  counterplot.  For  twenty-five  years  he  remained  the 
world's  foremost  steel-maker.  Had  he  chosen  to  stay  in  busi- 
ness, and  to  carry  on  war  against  his  competitors,  he  might 
to-day  have  been  an  industrial  dictator. 

"As  an  impelling  force,  and  as  a  great  leader  in  the  iron 
trade  in  this  country,  Mr.  Carnegie  has  been  without  a  peer," 
said  the  editor  of  the  Iron  Age. 

"  His  greatest  power  was  his  sublime  faith  in  the  future 
of  steel,"  admitted  one  of  his  personal  enemies. 

"  He  had  a  never-failing  confidence  in  the  importance  of  the 
steel  industry,  and  the  keenest  comprehension  of  trade  con- 
ditions," said  one  of  the  highest  officials  of  the  United  States 
Steel  Corporation. 

From  the  moment  that  he  decided  to  make  steel,  he  never 
wavered.  No  promise  of  honour  or  profit  could  separate  him 
from  steel.  The  position  of  United  States  Minister  to  Great 
Britain  was  offered  him,  and  he  refused  it.  Neither  would  he 
allow  the  use  of  his  name  in  connection  with  any  outside  busi- 
ness enterprise,  no  matter  what  inducements  were  shown  him. 
Years  ago,  for  example,  when  William  H.  Vanderbilt  died, 
a  committee  from  a  great  trust  company  waited  on  Carnegie 

170 


WORKMEN-PARTNERS   OF   CARNEGIE 

and  announced  that  they  had  decided  to  elect  him  a  director 
of  the  company  in  place  of  Vanderbilt.  At  that  time  Carnegie 
was  comparatively  young,  and  was  not  known  outside  of  Pitts- 
burgh; but,  to  the  amazement  of  the  committee,  he  declined 
the  honour  instead  of  being  overcome  with  gratitude. 

"  What?  "  said  they.  "  Don't  you  know  that  our  directors' 
list  is  the  most  exclusive  in  the  IJnited  States?  Your  name 
will  have  an  Astor  above  it  and  a  Vanderbilt  below  it.  How 
can  you  question  the  soundness  of  such  a  company?" 

"I  don't  doubt  or  question  anything,"  replied  Carnegie; 
"  but  you  cannot  use  my  name.  It  is  not  as  big  a  name  as  the 
others,  but  it  is  my  name,  and  I  intend  to  take  care  of  it.  All 
my  time  must  be  given  to  my  own  business.  You  are  welcome 
to  my  money,  but  you  cannot  have  my  name." 

ANDREW  CARNEGIE,  THE  AMERICAN 

Like  all  normal  men,  Andrew  Carnegie  has  been  fond  of 
approbation;  but  he  has  been  quick  to  give  praise  to  others. 
"  Better  than  columns  of  flattery," — he  wrote  at  the  end  of  an 
editorial  which  described  his  abilities  in  a  discriminating  way. 
"  I  have  got  credit  for  ten  times  more  than  I  ever  did,"  he 
said  when  the  Bessemer  medal  was  presented  to  him  in  1904. 
On  another  occasion  he  suggested  that  an  appropriate  epitaph 
for  himself  would  be:  "  Here  lies  one  who  knew  how  to  get 
around  him  men  who  were  cleverer  than  himself."  Such  an 
epitaph  would  be  far  from  the  truth;  but  there  are  in  active 
service  to-day  many  Carnegie-trained  steel-makers  who  have 
no  superiors  in  their  various  lines — such  men  as  Frick,  Corey, 
Schwab,  Gayley,  Scott,  Hunt,  Dinkey,  Williams,  and  Mor- 
rison. 

When  the  conditions  of  the  steel  trade  in  1875  and  in  1900 
are  compared,  it  will  be  seen  that  Carnegie  did  as  much  for 
steel  as  steel  did  for  Carnegie.  He  was  no  maker  of  schemes 

171 


THE   ROMANCE   OF  STEEL 

and  Wall  Street  bubbles.  He  built  upon  solid  foundations. 
The  men  whom  he  trained  will  train  others,  and  the  steel- 
mills  he  built  will  stand  for  generations.  To-day  there  is  not 
a  city  in  the  United  States,  nor  a  street,  nor  a  single  home, 
which  does  not  contain  some  of  the  fruits  of  this  one  man's 
life  work. 

Carnegie,  such  as  he  is  in  brain  and  pocket,  is  a  finished 
product  of  the  United  States.  Many  bright  Scottish  boys  have 
lived  and  died  in  Dunfermline;  but  there  have  been  no  other 
Carnegies.  Such  a  career,  whether  we  regard  it  with  compla- 
cency or  as  a  social  menace,  was  possible  only  in  this  country 
and  in  the  last  generation.  He  was  the  ripe  fruit  of  the  tree. 

When  he  was  elected  president  of  the  British  Iron  and  Steel 
Institute,  in  1902,  being  the  only  American  who  has  ever  re- 
ceived the  honour,  the  tears  came  to  his  eyes  as  he  took  the 
chair,  and  remembered  that  fifty-four  years  before  he  had  left 
Great  Britain  as  the  child  of  a  sad-hearted  emigrant,  who  was 
driven  by  the  hunger-wolf  from  his  native  land.  He  had  very 
good  reason,  from  his  point  of  view,  to  laud  the  glories  of 
"  Triumphant  Democracy." 

In  the  multiplication  of  his  capital  Carnegie  had  done  ten 
times  better  than  his  friend,  Sir  Henry  Bessemer,  whose  large 
profits  were  the  wonder  of  European  steel-makers.  In  the  first 
fourteen  years  of  his  steel-making  in  Sheffield,  Bessemer  and 
his  partners  had  made  eighty-one  times  their  invested  capital 
— a  hundred  per  cent,  every  two  months.  But  Carnegie,  with 
three  hundred  thousand  dollars  invested  in  1873,  had  in 
twenty-eight  years  cleared  more  than  eight  hundred  times  his 
capital.  This  was  an  average  of  three  thousand  per  cent,  a 
year,  or  a  hundred  per  cent,  every  thirteen  days.  By  1894  he 
had  become  the  richest  man  in  Pittsburgh,  displacing  Charles 
Lockhart,  a  pillar  of  the  Standard  Oil  Company,  who  had 
begun  life  there  as  a  little  Scottish  laddie,  earning  fifteen  cents 
a  day  in  a  grocery  store.  And  in  1901  Carnegie  was  not  only 

172 


WORKMEN-PARTNERS   OF   CARNEGIE 

the  possessor  of  unimaginable  wealth,  but  also  the  world's 
most  munificent  philanthropist  and  a  publicist  of  interna- 
tional reputation. 

As  for  Henry  Phipps,  his  climb  from  nothing  to  fifty  mil- 
lions is  well  illustrated  in  a  story  told  by  Frick.  There  was 
an  old  New  England  Yankee  who  lived  in  the  village  of  West 
Overton,  and  who  owned  the  biggest  chicken  farm  in  the 
county.  One  day  Frick  asked  him  how  he  came  to  lauch  out 
in  the  chicken  business. 

"  Well,"  said  the  old  man,  u  it  happened  this  way.  When 
I  was  a  young  fellow,  I  was  out  of  work  for  a  while.  So  I 
went  over  to  a  neighbour's  and  borrowed  a  hen  and  a  dozen 
fresh  eggs.  I  set  the  hen  on  the  eggs,  and  every  one  of  them 
hatched.  Then  I  waited  till  the  hen  had  laid  a  dozen  eggs. 
By  this  plan  I  was  able  to  pay  back  what  I  had  borrowed 
and  have  a  dozen  little  chickens  left  for  myself.  I  didn't  in- 
vest a  cent.  All  that  my  neighbour  lost  was  the  temporary 
use  of  a  hatful  of  eggs  that  he  never  missed;  and  this  big 
chicken  farm  is  the  result." 

THE  METHODS  OF  HENRY  PHIPPS 

Phipps,  unlike  Carnegie,  had  entered  the  iron  business  with- 
out the  investment  of  a  dollar  of  his  own  money.  The  eight 
hundred  dollars  which  admitted  him  as  a  partner  into  the 
Kloman  firm  had  been  borrowed  from  Thomas  N.  Miller. 
When  he  was  a  youth  of  seventeen,  Harry  Phipps  had  spent 
twenty-five  cents  in  advertising  for  a  better  job.  An  answer 
came  from  a  firm  of  iron-dealers,  and  decided  his  career.  But 
even  this  twenty-five  cents  had  been  borrowed  from  his 
brother,  so  that  it  may  literally  be  said  that  he  entered  the  path 
to  fifty  millions  without  the  payment  of  a  penny  as  an  entrance 
fee. 

Physically,  Henry  Phipps  is  even  smaller  than  Andrew 


THE   ROMANCE   OF   STEEL 

Carnegie.  He  has  almost  as  many  millions  as  inches.  Ap- 
parently, Carnegie  had  a  preference  for  small  men.  In  man- 
ner Phipps  is  soft-voiced,  nervous,  and  as  alert  as  a  chamois. 
In  mind  he  is  cautious,  shrewd,  plodding,  and  acquisitive. 
Broken  down  by  overwork,  he  had  been  forced  into  uncon- 
genial idleness  in  1888,  but  never  allowed  his  grasp  on  the 
company  to  relax.  In  1901  he  was  found  to  own  eleven  per 
cent,  of  the  stock  of  the  Carnegie  company — nearly  one-fifth 
as  much  as  Carnegie,  and  nearly  twice  as  much  as  Frick. 

Mr.  Phipps  married  Miss  Annie  Childs  Shoffer,  of  Pitts- 
burgh. They  have  now  three  sons  and  two  daughters.  On 
his  retirement,  in  1888,  he  showed  no  desire  to  escape  the 
smoke  and  grime  of  Pittsburgh,  but  built  a  palatial  home  in 
Allegheny,  which  contained  many  original  features.  In  the 
dining-room,  for  instance,  were  five  large  stained-glass  win- 
dows, gorgeously  coloured  and  each  with  a  painted  likeness  of 
one  of  his  children.  When  the  children  grew  older  and  de- 
veloped social  ambitions,  Mr.  Phipps  reluctantly  left  the 
scene  of  his  childhood  and  his  labours,  and  has  since  divided 
his  time  between  New  York  and  the  Scottish  Highlands, 
where  he  rents  Beaufort  Castle  from  Lord  Lovat.  Recently 
his  daughters  have  been  married — Miss  Helen  Phipps  to 
Bradley  Martin,  Jr.,  and  Miss  Amy  Phipps  to  the  Hon.  Fred- 
erick Guest,  second  son  of  Lord  Wimborne.  And  so  the  long 
steel  ladders  built  in  Pittsburgh  reach  in  one  generation  from 
Barefoot  Square,  Slabtown,  to  Beaufort  and  Skibo  Castle— 
from  the  cottages  of  American  workingmen  to  some  of  the 
greatest  ancestral  palaces  of  Europe. 


CHAPTER  VI 
THE   HARVEST  OF  GOLD 

The  Quarrel  Between  Carnegie  and  Frick — The  Negotiations  which  Led  to 
Carnegie's  Declaration  of  War  against  His  Competitors  and  the  Deal 
by  which  He  and  His  Partners  Were  Bought  Out  and  the  United  States 
Steel  Corporation  Was  Organised — What  the  Carnegie  Partners  Did 
with  Their  Millions  in  the  First  Flush  of  Fortune. 

IN  1899  came  the  great  quarrel  of  the  Carnegie  Steel 
Company.  Carnegie  collided  with  Frick — the  irrestible 
against  the  immovable.  The  tragedy  of  the  quarrel  was 
the  separation  of  Carnegie  and  Phipps,  who  had  been  the 
closest  friends  for  over  fifty  years.  And  its  importance  to  the 
general  public  lay  in  the  fact  that  in  the  struggle  the  lid  was 
knocked  off  the  treasury,  allowing  the  outside  world  to  dis- 
cover for  the  first  time  the  immense  profits  of  the  steel 
business. 

The  immediate  cause  of  the  quarrel  matters  little,  as  it 
became  inevitable.  Carnegie  and  Frick  were  incompatible, 
both  in  mind  and  temperament.  The  wonder  is  that  they 
agreed  for  thirteen  years.  Carnegie  represented  one  school  of 
steel-makers;  Frick  represented  another.  Carnegie  stood  for 
the  patriarchal  system  of  industry — for  one-man  power  and  the 
promotion  of  those  only  who  proved  loyal  and  obedient.  Frick 
stood  for  the  corporation  system  of  industry — for  the  rule  of 
the  directors — for  the  building  up  of  an  industrial  system 
which  should  be  interdependent  and  not  competitive — for  the 
socialisation  of  commerce. 

For  a  time  mighty  steel  kings  called  each  other  names  like 


THE   ROMANCE   OF   STEEL 

a  couple  of  schoolboys.  "  You  did."  "  I  didn't."  "  You  got 
mad  first."  "  You  pushed  me  in  the  hole."  "  Well,  it  was 
you  that  dug  the  hole."  And  so  the  quarrel  went  on,  to  the 
delight  and  enlightenment  of  the  world  at  large.  The  news- 
papers were  turning  their  searchlights  upon  golden  Pitts- 
burgh. The  Carnegie  Building  was  besieged  by  reporters. 
While  this  publicity  eventually  proved  worth  a  hundred  mil- 
lions to  Carnegie,  he  saw  nothing  but  danger  and  annoyance 
in  it  at  the  time,  and  a  secret  peace  conference  was  arranged 
at  Atlantic  City.  James  B.  Dill,  a  famous  corporation  lawyer, 
was  called  in  and  a  decision  was  reached  which  brought  the 
quarrel  to  an  end. 

The  company  was  reorganised  and  capitalised  at  three 
hundred  and  twenty  million  dollars,  half  stock  and  half  bonds. 
Frick  was  still  a  shareholder,  though  not  a  director,  and  held 
thirty-one  million  dollars'  worth  of  stock  and  bonds.  For 
arranging  this  settlement,  Mr.  Dill  received  a  fee  of  a  million 
dollars — the  largest  ever  paid  for  legal  services. 

Henry  Clay  Frick  became  at  once  one  of  the  central  figures 
of  the  iron  and  steel  world.  He  was  no  longer  "  Carnegie's 
man  Frick."  He  was  a  new  and  powerful  factor  in  com- 
mercial affairs.  He  was  not  an  expert  on  steel,  or  coal,  or  any 
other  one  thing.  His  power  lay  in  the  possession  of  a  co- 
ordinating mind  of  wonderful  efficiency.  Under  his  personal 
management  the  Carnegie  company  had  been  developed  into 
the  most  automatic  and  most  profitable  corporation  ever  or- 
ganised, and  he  was  now  only  fifty  years  of  age.  For  him 
to  enjoy  his  thirty-one  millions  in  idleness  was  out  of  the  ques- 
tion. Business  was  his  recreation— his  game — his  life.  "  To 
pour  work  on  Mr.  Frick  is  like  pouring  water  on  a  duck's 
back,"  said  S.  L.  Schoonmaker,  one  of  his  most  intimate 
friends.  Henceforth  he  would  emerge  from  the  smoke  of 
Pittsburgh  and  carry  on  his  work  in  the  national  arena. 

Mr.  Frick  has  been  well  called  "  the  perfected  type  of  the 

176 


S.    L.    SCHOONMAKER 


THE   HARVEST   OF   GOLD 

modern  business  man."  But  he  is  much  more.  He  is  trie  fore- 
runner of  a  much  better  business  system  than  the  present.  He 
has  the  commercial  virtues  that  make  a  man  wealthy  to-day. 
He  is  a  shrewd  bargainer.  When  he  sells,  he  looks  at  the  prop- 
erty through  the  small  end  of  the  telescope;  when  he  buys, 
through  the  big  end.  He  is  firm,  alert,  able,  progressive.  But 
he  is  also  one  of  the  most  distinguished  members  of  the  new 
school  of  capitalists  who  believe  in  a  "  community  of  inter- 
ests." He  is  one  who  advocates  "  team  play,"  not  individual 
prestige.  He  is  a  business  architect  upon  a  larger  plan  than 
that  followed  by  the  earlier  steel-makers.  He  is  not  a  dis- 
integrator of  business.  His  effort,  both  in  the  coke  and  steel 
industries,  has  been  not  to  ruin  competitors,  but  to  eliminate 
the  wastefulness  of  competition  and  to  make  terms  upon  which 
all  could  do  a  secure  and  profitable  trade. 

Mr.  Frick  looks  far  ahead.  He  knows  the  significance  of 
his  work,  although  his  own  generation  may  not.  "  Gradually 
the  whole  fabric  of  American  industry,"  he  says,  "  has  grown 
into  a  solid  structure  of  intersupporting  relationships.  One 
blunder  by  one  man  cannot  to-day  block  the  wheels  of  progress 
or  bring  ruin  to  thousands.  It  is  a  movement  from  feebleness 
to  strength.  We  are  creating  a  large,  orderly  system  of  indus- 
try and  finance,  which  will  give  courage  and  security  to  our 
business  men,  and  better  conditions  to  workmen.  There  will 
be  less  waste  and  warfare.  Brains,  energy,  and  character 
will  be  more  likely  to  find  their  true  level.  No  important 
business  will  be  left  to  stand  alone.  Instead  of  looking  upon 
this  industrial  evolution  with  alarm,  we  should  rather  wel- 
come it  as  sound  and  helpful  to  the  whole  human  race." 

THE   MOLTKE  OF  AMERICAN   FINANCE 

It  is  the  general  belief  that  Frick  could  not  have  begun  at 
the  foot  of  the  steel  ladder,  as  Carnegie  did.  Neither  could  he 

177 


THE   ROMANCE   OF   STEEL 

have  chosen  men  as  wisely  and  attached  them  to  himself  with 
the  fine  leadership  of  the  Scot.  But,  on  the  other  hand,  Frick 
was  far  superior  to  all  his  fellow  steel  kings  in  grasping  the 
newer  idea  of  consolidation  and  corporate  interdependence. 
Carnegie  played  checkers;  Frick  played  chess.  Carnegie  was 
absolutely  a  man  of  one  corporation;  Frick  has  innumerable 
interests.  Carnegie  built  up  an  industrial  feudalism,  in  which 
all  power  sloped  from  the  chief  downward  to  every  member 
of  his  tribe.  Frick  believes  in  the  socialisation  of  capital  for 
the  benefit  of  the  private  capitalists. 

"  Carnegie  was  a  Napoleon;  Frick  is  a  Von  Moltke,"  said 
a  Pittsburgher  who  has  known  both  men  for  more  than  twenty 
years.  Like  Napoleon,  Carnegie  won  his  victories  through  an 
army  that  was  quick,  loyal,  and  enthusiastic.  Like  Von 
Moltke,  Frick  won  by  following  out  vast  plans  that  cut  off  all 
possibility  of  mishap  or  accident.  Carnegie  fully  trusted  only 
those  whom  he  had  promoted  from  the  rank  and  file.  Frick, 
on  the  contrary,  prefers  to  co-operate  with  his  equals.  In  Pitts- 
burgh, Frick's  best  comrade  in  finance  is  A.  W.  Mellon,  the 
most  astute  and  independent  capitalist  in  western  Pennsyl- 
vania. Frick  is  a  director  in  eight  Pittsburgh  corporations; 
his  secretary,  William  A.  Carr,  is  a  director  in  eight  others; 
and  the  Mellons  sit  at  the  board  of  eighty-two.  In  New  York, 
Frick  is  the  close  associate  of  H.  H.  Rogers,  the  master-mind 
of  the  active  Standard  Oil  group  of  financiers.  Taking  him 
all  in  all,  it  would  be  hard  to  find  a  more  central  or  pivotal 
figure  than  Henry  Clay  Frick  in  the  whole  field  of  American 
finance. 

THE  PERSONALITY  OF  H.  C.  FRICK 

Keen,  self-possessed,  approachable,  courteous,  Mr.  Frick 
might  more  appropriately  be  called  the  perfected  type  of  the 
self-made  American.  He  is  no  uncut  diamond,  as  many  steel- 
makers are.  He  has  the  greater  and  the  lesser  virtues.  When, 

178 


HENRY    H.    ROGERS 


THE   HARVEST   OF   GOLD 

during  the  Homestead  strike,  a  Russian  anarchist  broke  into 
his  office  and  inflicted  serious  wounds  upon  him  with  pistol 
and  dagger,  his  first  words  were,  "  Don't  kill  him,"  as  he  rose 
bleeding  from  the  floor. 

Yet  to  the  possession  of  this  rare  physical  courage  he  adds 
the  tenderest  sentiment.  His  devotion  to  flowers,  to  music, 
to  paintings,  and,  above  all,  to  his  two  children,  Childs  and 
Helen,  is  well  known  in  Pittsburgh.  Childs,  a  slim  young  man 
of  twenty-four,  is  crown  prince  of  the  Frick  dynasty,  and 
Helen,  a  young  lady  of  eighteen,  will  be  the  wealthiest  heiress 
born  in  the  Smoky  City.  Mr.  Frick  has  had  a  special  check- 
book made,  which  he  uses  for  all  charitable  purposes;  and 
upon  every  check  is  a  picture  of  his  daughter's  face.  His 
private  art  gallery  is  one  of  the  finest  in  the  United  States.  In 
it  are  master-works  by  Corot,  Romney,  Murillo,  Lawrence, 
Millet,  Gainsborough,  Turner,  and  Rousseau.  It  was  Mr. 
Frick  who  paid  one  hundred  thousand  dollars  for  Dagnan- 
Bouveret's  "  Christ  at  Emmaus."  Even  in  his  inner  business 
office  at  Pittsburgh  a  magnificent  oil  painting  of  tigers  hunt- 
ing their  prey  hangs  on  the  wall. 

Because  Mr.  Frick's  "Yes"  is  "Yes,"  and  his  "No"  is 
"  No,"  he  has  been  popularly  characterised  as  a  capitalistic 
Bismarck — a  man  who  is  steel  by  trade  and  steel  by  nature. 
During  the  five  months  of  the  Homestead  strike,  all  the  forces 
of  the  labour  and  Republican  worlds  surged  and  broke  around 
him  like  waves  upon  a  rock.  "  If  the  President  of  the  United 
States,  and  his  entire  Cabinet,  and  the  Republican  National 
Committee,  and  Andrew  Carnegie  in  person,  should  all  come 
to  me  and  sue  for  peace,  I  would  not  yield  one  inch,"  he  said 
as  he  lay  wounded  upon  his  couch.  "  I  shall  fight  it  out  if  it 
takes  all  summer  and  all  winter  and  every  dollar  I  have  in 
the  world."  Yet  it  was  the  same  Frick,  afterward,  who  took 
pity  upon  two  of  the  leaders  of  the  Homestead  strikers,  and 
paid  for  the  education  of  their  three  children.  This  was  not 

179 


THE   ROMANCE   OF   STEEL 

clone  ostentatiously,  but  so  quietly  that  most  Pittsburghers  will 
learn  of  it  here  for  the  first  time. 


PRICK'S    ATTITUDE    TOWARD    CARNEGIE 

In  speaking  of  Carnegie,  who  has  been  his  best  friend  and 
his  worst  enemy,  he  displays  no  feeling.  "  I  have  no  preju- 
dice against  Mr.  Carnegie,"  he  answered  quietly,  when  he 
was  asked  about  the  Scottish  steel-master;  "  but  I  do  not 
approve  of  his  methods  of  doing  business."  His  reply  to 
Carnegie's  attack  upon  him,  so  say  Pittsburghers,  was  made 
not  with  words,  but  with  the  erection  of  the  Frick  Building. 
This  masterpiece  among  skyscrapers,  built  wholly  of  steel  and 
white  marble,  and  with  a  thousand  rooms,  half  encircles  the 
Carnegie  Building  and  towers  a  hundred  feet  above  it. 

Another  instance  of  the  poise  and  balance  of  Mr.  Frick's 
mind  is  shown  in  his  support  of  Kingsley  House — a  univer- 
sity settlement  in  Pittsburgh.  Although  he  is  usually  re- 
garded as  a  matter-of-fact  financier,  without  social  ideals 
or  visions  of  a  co-operative  commonwealth,  he  is  a  warm 
personal  friend  and  backer  of  Dean  Hodges,  the  Christian 
socialist,  who  founded  Kingsley  House. 

Being  the  most  self-contained  man  in  Pittsburgh,  Mr. 
Frick  has  commonly  been  alluded  to  as  a  human  machine— 
a  money-making  sphinx.  But  his  intimate  friends  say  other- 
wise. He  dislikes  society  functions  and  publicity,  not  because 
he  is  in  any  degree  misanthropic,  but  because  of  an  instinctive 
hatred  of  all  veneer  and  make-believe.  He  feels  at  home 
only  among  realities.  Whatever  his  ambitions  may  be,  his 
unusual  talents  will  inevitably  make  him  the  arbitrator  and 
harmoniser  of  American  business  and  finance.  No  one 
is  better  suited  than  he  to  become  the  umpire  of  the  whole 
game.  His  mind  is  judicial  in  the  highest  degree. 

"  Frick  is  naturally  an  arbiter,"  says  his  friend  Lovejoy. 

180 


THE   HARVEST   OF   GOLD 

"  IVe  often  heard  him  say,  after  he  had  decided  a  dispute, 
'  I  wish  I  could  have  decided  that  the  other  way,  but  I 
couldn't  do  it.' '  In  the  Senatorial  contest  of  two  years  ago, 
in  Pittsburgh,  it  was  Frick  who  was  called  in  to  make  the 
decision  and  who  seated  P.  C.  Knox  in  the  United  States 
Senate.  In  the  more  recent  controversies  over  the  manage- 
ment of  the  great  New  York  insurance  companies,  it  was 
Frick  who  came  to  the  front  as  an  impartial  investigator,  and 
who  demanded  the  reform  of  the  abuses  which  he  helped  to 
bring  to  light.  He  may  perhaps  be  called  the  unofficial  head 
of  the  United  States  Steel  Corporation,  and  every  year  adds 
to  the  scope  of  his  influence.  For  the  pomp  and  pageantry  of 
power  he  cares  absolutely  nothing;  but  for  the  power  itself 
and  its  heaviest  responsibilities,  no  man  is  more  willing  or 
better  prepared  than  Henry  Clay  Frick. 

But,  to  move  on  into  the  main  current  of  the  story,  at  the 
time  of  the  Frick-Carnegie  suit  the  whole  swing  of  industrial 
evolution  was  toward  consolidation.  Ore  pools,  pig-iron 
pools,  and  steel-rail  pools  had  shown  the  financial  benefits  of 
co-operation.  When  the  Lackawanna  works  broke  up  the 
rail  pool  in  1897,  the  price  of  rails  dropped  in  a  moment 
from  twenty-seven  to  seventeen  dollars,  and  compelled  the 
rail-makers  to  come  together  again  in  a  hurry.  "  McKinley 
prosperity  "  was  at  its  height.  Capital  was  plentiful.  There 
was  a  general  demand  for  stock  in  industrial  corporations, 
and  to  meet  the  demand  New  Jersey  was  manufacturing 
"trusts"  by  the  score.  Little  concerns  were  huddling  to- 
gether for  protection.  It  was  a  time  of  big  ideas  and  big 
undertakings. 

Ever  since  1889  it  had  been  known  that  Carnegie  was  will- 
ing to  sell,  as  at  that  time  he  had  unsuccessfully  tried  to 
persuade  a  syndicate  of  English  investors  to  buy  him  out.  In 
1899,  Just  before  the  Frick-Carnegie  suit,  Judge  William  H. 
Moore,  one  of  Chicago's  most  daring  and  adventuresome 

181 


THE   ROMANCE   OF  STEEL 

knights  errant  of  finance,  had  crashed  into  the  story  of  steel 
by  trying  to  do  what  Mr.  Morgan  accomplished  two  years 
later.  For  years  Judge  Moore  and  his  brother  had  been  able 
corporation  lawyers,  with  stock-market  inclinations.  They 
had  recently  come  to  the  front  as  company  promoters  on  a  gi- 
gantic scale.  With  cheerful  indifference  they  had  made  and 
lost  millions.  Having  promoted  the  Diamond  Match  Com- 
pany, they  went  down  with  it  when  it  foundered,  losing  four 
millions  or  more.  In  a  single  year,  by  floating  the  National 
Biscuit  Company  and  the  American  Tin  Plate  Company, 
they  paid  their  debts  and  had  millions  left. 

Had  they  been  the  owners  of  Aladdin's  lamp,  they  could 
not  have  transformed  defeat  into  victory  more  magically. 
With  ten  millions  of  American  Tin  Plate  common  stock  in 
their  possession — their  first  steel  money — they  set  out  to  make 
more  steel  conquests.  In  a  year  they  had  organised  the 
American  Steel  Hoop  and  the  National  Steel  companies, 
getting  five  millions  apiece  for  the  work.  Then,  elated  with 
success,  they  rushed  to  Carnegie  and  offered  him  a  million 
for  a  ninety  days'  option  on  his  share  of  the  Carnegie 
company. 

"Get  my  partners,  Phipps  and  Frick,  to  join  you  in  this 
proposition,  and  I  will  consent,"  said  Carnegie.  The  price 
was  fixed  at  $157,950,000,  more  than  one-third  oi  which  was 
to  be  paid  in  cash.  Phipps  and  Frick  were  willing,  so  Car- 
negie increased  the  price  of  the  option  to  $1,170,000,  and 
received  a  check  for  this  amount. 

When  the  agreement  was  signed,  there  was  every  reason 
to  believe  that  the  steel  king  had  abdicated  his  throne.  Frick, 
Phipps,  and  the  Moores  constituted  a  powerful  combination. 
The  problem  was  to  get  sixty  millions  or  so  in  cash,  and  the 
work  was  done.  But  at  that  time  few  New  York  or  Chicago 
financiers  knew  the  value  of  Pittsburgh.  The  J.  P.  Morgan 
interests  refused  to  go  into  the  scheme  on  any  terms.  Then, 

182 


THE   HARVEST   OF   GOLD 

like  a  thunderbolt  from  a  blue  sky,  came  the  announcement 
of  the  death  of  Roswell  P.  Flower,  one  of  the  "  bull"  leaders 
of  the  New  York  Stock  Exchange.  Stocks  tumbled  and 
money  was  suddenly  pulled  up  out  of  reach.  The  panic  was 
over  in  a  few  days,  but  the  business  situation  was  changed. 
Frick  and  Phipps  dashed  over  to  Skibo  Castle  and  pleaded 
for  more  time.  "  Not  a  day  longer,"  replied  Carnegie.  He 
retained  not  only  the  million  dollars  given  him  by  the  Moore 
brothers,  but  also  the  one  hundred  and  seventy  thousand 
dollars  advanced  by  his  two  partners.  It  was  the  easiest  mil- 
lion that  he  had  ever  made. 


ROCKEFELLER    THINKS    OF    BUYING 

The  next  would-be  buyer  was  John  D.  Rockefeller.  He 
had  captured  ore  lands  and  an  ore  railway  in  Minnesota, 
built  a  fleet  of  ore  vessels,  and  invested  money  in  the  Federal 
Steel  Company.  Now  he  asked  Carnegie  to  make  his  price 
for  the  Carnegie  Steel  and  Frick  Coke  companies.  "Two 
hundred  and  fifty  millions,  half  in  cash  and  half  in  five  per 
cent,  gold  bonds,"  replied  Carnegie.  Mr.  Rockefeller  shook 
his  head.  He  had  expected  to  pay  a  large  part  of  the  price 
in  stock.  It  was  not  so  easy,  he  found,  to  bargain  with  Car- 
negie as  it  had  been  with  Lon  Merritt  and  his  brothers,  six 
years  before. 

No  man  ever  recognised  a  business  opportunity  with 
more  electrical  swiftness  than  Andrew  Carnegie.  Here 
was  "Standard  Oil"  coming  to  him  with  hundreds  of  mil- 
lions in  its  hands.  Suddenly  he  realised  that,  so  far  as  the 
iron  and  steel  business  was  concerned,  these  men  were  in  his 
power.  He  was  the  steel  king,  and  Messrs.  Rockefeller, 
Morgan,  and  the  rest  had  become  lesser  chieftains  of  the  steel 
empire,  regarding  him  with  apprehension  and  alarm.  This 
was  a  pleasant  thought,  and  a  profitable  one.  One  week  after 

183 


THE   ROMANCE   OF  STEEL 

it  had  occurred  to  him,  he  had  jumped  his  price  up  tb  three 
hundred  millions. 

The- suggestion  had  been  made  that  the  four  senior  partners 
should  sell  out  to  the  younger  men,  and  seven  days  after  the 
Rockefeller  offer  Carnegie  proposed  that  the  younger  part- 
ners should  pay  three  hundred  millions  for  the  entire 
property,  half  in  gold  bonds  and  half  in  stock.  This 
offer  was  discussed  but  npt  accepted.  The  young  part- 
ners missed  the  greatest  opportunity  of  their  lives.  If 
they  had  possessed  the  business  ability  of  their  chief,  they 
might  have  cleared  over  a  hundred  and  fifty  millions  in  the 
next  two  years.  Dame  Fortune  hamme'red '  loudly  on  their 
door,  but  they  thought  that  her  name  was  Risk,  and  so  they 
sat  and  debated  until  she  went  away. 

Every  day  Mr.  Carnegie's  vision  of  millions  grew  more 
radiant.  His  brain  whirled  with  the  details  of  a  selling  cam- 
paign, the  like  of  which  had  never  been  known  before.  In 
Wall  Street  language,  he  became  a  Carnegie  Steel  Company 
"bull"— a  furious,  rampant,  untamable  "bull."  Million 
was  piled  on  million.  The  twenty-five  millions  for  which 
.the  company  had  been  capitalised  seven  years  before  seemed 
to  him  now  a  mere  handful  of  nickels.  The  more  he  figured, 
the  more  he  blended  in  the  future  with  the  present.  Soon  the 
three*  hundred  millions  Became  four  hundred.  "  I  favour 
holding  on  for  two  or  three  years,"  he  wrote  to  his  partners. 
"  There  is  no  question  but  we  can  sell  our  property  for  four 
hundred  million  dollars." 

In  1889  Carnegie  had  retired  from  active  business,  saying 
that  "no  consideration  in  the  world  would  induce  me  to 
return  to  it."  But  now  he  flung  aside  his  books  and  fishing- 
tackle,  came  down  from  his  Scottish  hills,  and  began  to  "  bull 
the  market"  in  earnest.  He  set  on  foot  a  series  of  operations 
which,  if  concluded,  would  have  driven  his  competitors  out 
of  business  and  made  him  the  absolute  dictator  of  the  steel 

184 


JOHN    D.    ROCKEFELLER 


THE   HARVEST   OF   GOLD 

world.  It  was  "  war  to  the  knife  and  the  knife  to  the  hilt." 
Never  before  had  a  multimillionaire  run  amuck  with  such 
force  and  fury.  "  Henceforth  I  will  have  only  one  profit 
from  the  ore  to  the  finished  product,"  he  said. 

To  fight  Rockefeller,  he  ordered  seven  eight-thousand-ton 
ore-carrying  steamships.  To  fight  the  Pennsylvania  Rail- 
road, he  set  a  corps  of  surveyors  at  work  mapping  out  a 
railway  from  Pittsburgh  to  the  ocean.  To  fight  the  National 
Tube  Company,  he  announced  that  five  thousand  acres  of 
land  had  been  bought  at  Conneaut,  and  that  he  had  decided 
to  build  a  twelve-million-dollar  tube  works.  To  fight  the 
American  Steel  and  Wire  Company,  a  new  rod-mill  was  to 
be  erected  near  Pittsburgh.  And  to  fight  all  other  steel  com- 
panies, he  proclaimed  that  ten  million  dollars  were  to  be  spent 
at  once  in  improvements  which  would  put  his  mills  beyond 
the  reach  of  competition. 

These  were  not  mere  threats.  He  had  the  men  and  the 
money  and  the  mills.  His  personal  profits  in  1900  amounted 
to  nearly  twenty-five  millions.  He  was  making  one-quarter 
of  all  the  Bessemer  steel  in  the  United  States.  He  was  pro- 
ducing three  million  tons  of  pig  iron  a  year.  He  was  mining 
twenty-eight  per  cent,  of  the  ore  in  America,  and  producing 
half  of  the  structural  steel  and  armour-plate.  His  freight  bill 
was  ten  millions — his  pay-roll  was  fifteen.  He  was  making 
open-hearth  steel  for  sixty  per  cent,  less  than  his  competitors, 
and  rails  for  four  dollars  a  ton  less  than  they  cost  in  Chicago. 
He  was  selling  his  steel  in  England  for  ten  shillings  per  ton 
less  than  English  prices.  No  other  plant  in  Europe  or 
America  was  so  well  equipped  or  so  well  managed  as  his. 
And  he  was  only  sixty-five — twenty  years  younger  than  his 
friend  Gladstone  had  been  when  presiding  over  the  destinies 
of  the  British  Empire. 

"  GREAT  STEEL  WAR,"  shrieked  the  newspapers.  If  Car- 
negie would  actually  go  so  far  as  to  give  open  battle  to  the 

185 


THE   ROMANCE   OF  STEEE 

Pennsylvania  Railroad,  where  would  he  stop?  All  Pitts- 
burgh, all  Pennsylvania,  blustered  and  cowered  before  this 
mighty  corporation.  No  one  had  ever  dared  to  throw  down 
the  gauntlet  to  Cassatt — the  monarch  of  an  eleven-thousand- 
mile  empire.  "  If  Carnegie  begins  to  make  tubes,"  said  hun- 
dreds of  frightened  manufacturers,  "he  may  decide  later  to 
make  axes,  ploughs,  machinery.  He  may  wipe  us  all  out  with 
this  new  policy." 

To  a  large  extent  his  declaration  of  war  was  a  measure  of 
self-defence.  The  Moore  and  Morgan  and  Rockefeller  steel 
interests  were  combining  in  such  a  way  as  to  cut  off  trade 
from  the  Carnegie  company.  They  were  encroaching  upon 
his  territory.  "A  nation  should  never  make  war  except  to 
repel  invaders,"  he  had  said  on  a  public  occasion.  But  here 
was  an  invasion  of  his  market  by  the  most  formidable  group 
of  financiers  in  the  country.  His  supremacy  was  in  danger, 
and  with  "  Scots  wha  hae "  pluck  he  at  once  charged  head- 
long upon  the  enemy. 

The  threat  of  competition  had  always  been  one  of  his 
favourite  weapons.  When  the  prices  of  the  Frick  Coke  Com- 
pany were  not  low  enough  to  suit  him  he  threatened  to  buy 
twenty  thousand  acres  of  coal  land  and  build  coke  ovens  of 
his  own.  When  the  Dilworth-Porter  Spike  Company  with- 
drew its  trade,  he  brought  it  back  by  threatening  to  build 
a  spike-mill.  The  pressed-steel  car  people  were  kept  in  line 
by  a  similar  warning;  and  a  number  of  other  customers  were 
influenced  by  fear  as  well  as  favour.  And  now,  finding  him- 
self facing  the  largest  hostile  force  that  he  had  ever  encoun- 
tered, he  rallied  his  clansmen  and,  with  the  valour  and  the 
spirit  of  his  fighting  ancestors,  prepared  to  give  battle  all 
along  the  line.  It  was  one  of  the  most  critical  moments  in 
American  industrial  history. 


186 


THE   HARVEST   OF   GOLD 

CARNEGIE'S  EFFECTIVE  GENERALSHIP 

When  Carnegie  struck,  the  blow  fell  with  such  swiftness 
and  force  that  the  enemy  was  thrown  into  confusion.  There 
was  a  panic  among  millionaires.  They  found  themselves 
attacked,  not  only  in  front,  but  on  all  sides.  From  every 
quarter  they  could  hear  the  wild  screeching  of  the  bagpipes. 
Rumours,  which  spring  from  fear  as  often  as  from  hope, 
added  to  the  general  consternation.  It  was  said  that  Carnegie 
had  made  a  fighting  alliance  with  the  Alabama  iron  and  steel 
companies.  A  mysterious  cablegram  from  Europe  was  flung 
like  a  bomb,  announcing  that  a  vast  international  steel  com- 
bination was  about  to  be  formed.  Francis  H.  Clergue,  with 
his  French  eloquence,  was  foretelling  a  glorious  future  for 
his  prospective  twenty-million-dollar  steel  plant  at  the  Can- 
adian Sault  Ste.  Marie.  And  a  body  of  British  investors  was 
stimulating  curiosity  by  making  a  tour  of  inquiry  among 
American  iron  and  steel  works. 

The  immense  profits  in  steel  were  now  well  known  even 
to  the  general  public.  What  with  lawsuits  and  Congres- 
sional committees  and  political  "Tin  Plate"  campaigns,  it 
was  the  common  opinion  that  every  steel  works  inevitably 
produced  an  output  of  millionaires.  Before  the  eyes  of  the 
steel  men  lay  the  Promised  Land  of  Profits,  but  defended  at 
every  point  by  the  warlike  Carnegie  and  his  veteran  army  of 
Philistines.  Carnegie  was  a  hardened  warrior  of  thirty-five 
years'  experience.  He  knew  every  foot  of  the  ground,  while 
most  of  his  competitors  were  strangers.  In  the  first  clash 
they  recognised  at  once  his  skill  and  generalship.  They  were 
playing  his  game,  not  theirs,  and  his  swift  moves  transformed 
them  into  a  rabble. 

"  We  must  get  rid  of  Carnegie.  At  all  costs,  we  must  buy 
him  out.  Otherwise,  he  will  wreck  himself  and  us.  We  can 
make  no  alliance  with  this  'rule  or  ruin '  autocrat.  We  must 

187 


THE   ROMANCE   OF   STEEL 

push  him  out  into  philanthropy  and  book-publishing.  Where 
is  Morgan?  No  one  but  Morgan  can  get  us  out  of  this  fix?" 
And  the  frantic  financiers  rushed  to  Morgan  as  frightened 
children  run  to  their  mother,  clamouring  in  their  alarm  for 
help,  for  guidance,  for  protection.  Such  were  the  birth- 
throes  of  the  world's  greatest  corporation. 

Carnegie,  Phipps,  and  Lauder  had  always  been  opposed, 
in  theory  at  least,  to  the  formation  of  a  steel  "  trust."  In 
1884  Carnegie  had  said:  "We  are  creatures  of  the  tariff, 
and  if  ever  the  steel  manufacturers  here  attempt  to  control, 
or  to  have  any  general  understanding  among  them,  the  tariff 
would  not  exist  one  session  of  Congress.  There  never  has 
been  and  never  will  be  such  an  understanding."  Five  years 
later  Phipps  wrote  to  Carnegie :  "  I  am  gratified  that  we 
are  not  to  go  out  of  business,  and  especially  to  make  room  for 
a  trust,  which  is  by  no  means  a  creditable  thing.  As  you  say, 
the  tariff  would  be  repealed  on  rails,  and  rightly  so."  Lauder 
described  the  situation  to  me  with  perfect  frankness,  saying: 
"  We  certainly  had  our  trade  agreements,  pools,  and  so  forth 
in  those  days ;  but  they  were  always  made  more  or  less  secretly. 
Public  opinion  was  then  strongly  in  favour  of  competition, 
and  we  could  not  form  combinations  openly,  as  we  do 
to-day." 

SCHWAB'S  PERSUASIVE  ADVOCACY 

Frick  was  at  all  times  in  favour  of  combination;  and  as  for 
Schwab,  he  was  first  on  one  side  and  then  on  the  other.  "  A 
big  business  enterprise,"  he  said,  "  is  invariably  built  up 
around  one  man."  Soon  afterward,  however,  he  became  con- 
vinced that  Carnegie  was  about  to  plunge  the  country  into 
a  disastrous  war  of  corporations,  and  from  that  moment  he 
was  the  most  persuasive  advocate  of  consolidation.  At  a  ban- 
quet given  in  his  honour,  at  the  University  Club,  New  York, 
he  painted  so  eloquent  a  word  picture  of  the  benefits  of 

1 86 


LORD    A.    J.    F.    LEITH 


THE   HARVEST   OF   GOLD 

industrial  peace  as  plainly  to  impress  Mr.  Morgan  and  the 
other  financiers  who  were  present. 

A  few  days  afterwards,  John  W.  Gates  and  Schwab,  who 
had  been  talking  of  a  steel  consolidation,  off  and  on,  for  three 
years,  went  to  see  Morgan.  They  arrived  at  his  house  at  nine 
o'clock  at  night,  and  they  discussed  the  situation  until  five 
o'clock  the  next  morning.  It  was  an  eight-hour  talk,  but  it 
was  worth  while.  Morgan  was  shown  the  big  possibilities  of 
the  steel  business,  and  persuaded  to  act.  Dawn  and  decision 
arrived  together,  and  he  finally  told  Schwab  to  go  to  Carnegie 
and  ask  "  How  much?  " 

Schwab  went  to  Carnegie  and  the  two  figured  out  a  price 
which  was  far  beyond  their  most  optimistic  dreams.  All  past 
estimates  were  wiped  out.  The  one  towering  fact  which  they 
kept  before  them  was  that  their  company  had  cleared  forty 
millions  during  the  last  year.  They  were  not  selling  so  much 
steel,  and  brick,  and  machinery.  They  were  selling  a  money- 
making  mechanism,  which  had  taken  thirty-six  years  to  con- 
struct. And  so,  in  the  letter  which  Schwab  carried  back  to 
Morgan,  were  the  following  figures: 

Five-per-cent.  gold  bonds $304,000,000 

Preferred  stock 98,277,120 

Common  stock 90,279,040 

Taking  the  preferred  stock  at  par  and  the  common  at  fifty, 
this  meant  a  cash  price  of  $447,416,640.    Add  to  this  the  forty 
millions  of  profit  for  the  year,  and  the  total  was  $487,416,640 
—nearly  half  d  billion. 

HOW   THE  GtfEAT  SALE   WAS   PUT  THROUGH 

To  ask  such  a  price  seemed  the  climax  of  audacity.  It  was 
almost  a  two-hundredth  part  of  the  national  wealth.  It  was 
the  value  of  all  the  wheat,  barley,  and  cheese  produced  in  the 
United  States  in  1900 — more  than  the  combined  dividends  of 

189 


THE   ROMANCE   OF   STEEL 

all  American  railroads  for  the  previous  four  years.  It  would 
pay  the  President's  salary  for  nine  thousand  years.  It  was 
more  than  a  year's  product  of  gold,  silver,  and  coal.  In  Ger- 
many it  would  build  ten  enormous  steel-plants  like  Krupp's 
— the  pride  of  Europe.  And  for  this  huge  sum  Carnegie 
offered,  not  an  empire,  not  a  State,  but  a  single  corporation 
with  forty-five  thousand  employees.  It  was  like  capitalising 
every  man  in  his  employ  at  ten  thousand  dollars  apiece. 

Mr.  Morgan  first  called  in  Judge  Gary,  with  whom  he 
had  been  previously  connected  in  steel  corporations.  Gary 
was  in  favour  of  a  merger,  and  the  bigger  the  better.  Then 
came  Frick,  and  after  him  a  small-sized  mob  of  financiers. 
Schwab  set  forth  the  strong  points  of  the  Carnegie  company 
in  the  rosiest  hues,  piled  fact  on  fact  and  figure  on  figure, 
glossed  over  sundry  debts  and  disadvantages,  and  in  a  remark- 
ably short  time  persuaded  his  customers  to  pay  his  price.  By 
this  achievement  he  became  the  champion  salesman  of  the 
world. 

Fortunately  for  him,  he  was  dealing  with  Morgan,  who  is, 
according  to  one  of  the  directors  of  the  Steel  Trust,  "  careless 
and  a  poor  bargainer."  To  one  who  dealt  in  nothing  but 
millions,  what  were  a  few  dozen  more  or  less?  Also,  fortu- 
nately for  him,  the  cry  of  the  other  steel-makers  was  ringing 
in  Morgan's  ears — "At  any  cost,  buy  out  Carnegie."  Gangs 
of  men  were  already  at  work  clearing  the  ground  for  the 
proposed  twelve-million-dollar  tube  works  at  Conneaut,  with 
which  Carnegie  would  bankrupt  all  competitors.  The  maney 
had  already  been  subscribed  for  the  Carnegie  railroad  from 
Pittsburgh  to  the  sea.  Everything  had  certainly  been  done 
to  create  a  "  selling  atmosphere."  The  men  whom  Carnegie 
was  threatening  saw  that  it  was  a  case  of  being  merged  or 
sMbmerged,  and  practically  allowed  Schwab  to  dictate  the 
terms  of  industrial  peace.  They  bought  out  Carnegie  at  his 
own  price. 

190 


THE   HARVEST   ®F   GOLD 

THE   CAMPAIGN    OF   THE    BUYERS 

This  account  of  the  Steel  Trust's  birth  is,  of  course,  from 
the  standpoint  of  the  Carnegie  company.  Another  account, 
from  the  side  of  the  venturesome  financiers  who  did  the  buy- 
ing, ought  to  be  given  at  this  point.  We  have  traced  the 
progress  of  the  selling  campaign,  which  resulted  successfully. 
And  now,  in  the  next  few  paragraphs,  we  shall  see  how  the 
buying  campaign  began. 

A  couple  of  years  before  this  time,  some  of  the  directors 
of  the  Illinois  Steel  Company  had  caught  the  spirit  of  con- 
solidation. The  first  suggestion  of  anything  practical  came 
from  A.  J.  Forbes  Leith,  who  owned  an  interest  in  an  ore- 
carrying  railroad  near  Chicago.  He  proposed  that  the 
Illinois  Steel  Company  should  buy  this  railroad.  Then  some 
one  else  proposed  that  the  Minnesota  Iron  Company,  which 
was  rich  in  ore  and  ore-ships,  should  be  taken  into  the  family. 
A  committee  was  formed  to  arrange  a  plan  of  consolidation. 
Its  members  were  Elbert  H.  Gary,  Senator  Spooner,  Robert 
Bacon,  and  the  late  ex-Governor  Flower,  of  New  York.  The 
longer  they  talked  over  the  scheme,  the  better  it  seemed.  The 
final  result  was  the  organising  of  the  Federal  Steel  Company, 
Gary  and  Bacon  having  done  most  of  the  work,  and  H.  H. 
Rogers  having  fixed  the  basis  of  consolidation. 

So  far  as  steel-mills  were  concerned,  the  Federal  Steel 
Company  could  not  compare  with  the  Carnegie  company. 
But  so  far  as  its  ore,  its  ships,  its  railroads,  and  its  backers 
were  concerned,  it  was  one  of  the  most  powerful  corporations 
in  the  world.  Among  its  directors  were  J.  Pierpont  Morgan, 
H.  H.  Rogers,  D.  O.  Mills,  Marshall  Field,  Norman  B. 
Ream,  Nathaniel  Thayer,  ex-Governor  Flower,  and  H.  H. 
Porter.  Its  president  was  Elbert  H.  Gary,  who  is  now  at  the 
head  of  the  Steel  Trust. 

On  April  i,  1899,  Frick  came  to  Gary  with  a  scheme  to 

191 


THE   ROMANCE   OF   STEEL 

consolidate  seven  or  eight  big  steel  companies,  whose  total 
capital  was  nearly  four  hundred  millions.  Gary  approved  it, 
but  the  Federal  Steel  Company  did  not.  "  Too  big,"  said  H. 
H.  Rogers.  "Too  big,"  said  Morgan.  "Too  big,"  echoed 
the  others.  Then,  a  few  days  later,  Schwab  came  in  with  a 
rush  and  swept  back  the  doubters. 

"My  arguments,"  said  Schwab,  "were  mainly  four — the 
economies  that  would  result  from  consolidation,  the  improve- 
ment of  the  general  business  situation,  the  benefit  to  labour, 
and  the  steadying  of  the  steel  trade."  One  by  one  the  big 
financiers  were  convinced.  Morgan  called  in  Robert  Bacon, 
Marshall  Field,  Elbert  H.  Gary,  Norman  B.  Ream,  H.  H. 
Porter,  D.  O.  Mills,  and  H.  H.  Rogers.  After  two  or  three 
hours'  earnest  talk  they  said  "Yes."  And  so  the  greatest  of 
all  industrial  organisations  was  set  on  foot  with  less  fuss  and 
palaver  than  might  be  required  to  make  a  horse  trade  between 
two  farmers. 


CAPITAL   MEETS  THE  ISSUE 

Gary  was  set  to  work  opening  up  negotiations.  D.  G.  Reid 
was  brought  in,  and  he,  in  turn,  persuaded  Judge  Moore  to 
join  the  group.  Moore  had  lost  a  million  a  short  time  before, 
trying  to  do  this  very  thing;  but  he  was  game  enough  to  try 
again.  Francis  Lynde  Stetson  was  called  in,  to  give  legal 
advice.  Frick  was  sent  to  bag  John  D.  Rockefeller,  and  suc- 
ceeded. The  John  W.  Gates  group  and  the  Moores  made 
the  most  trouble,  by  holding  out  for  a  high  price;  but  they 
were  finally  satisfied.  To  George  W.  Perkins  was  assigned 
the  task  of  putting  on  the  finishing  touches,  and  the  immense 
corporation  was  ready  to  be  launched. 

In  the  next  chapter  we  shall  describe  the  details  and  the 
scope  of  this  greatest  of  all  business  transactions.  Here  the 
important  facts  are  the  passing  of  Carnegie  from  the  field 

192 


H.    H.    PORTER 


THE   HARVEST   OF   GOLD 

and  the  sudden  enrichment  of  him  and  his  partners.  The 
Carnegie  company  had  burst  into  the  Golden  Age,  with  a 
suddenness  which  amazed  and  dumbfounded  its  fortunate 
shareholders.  The  young  Scotsman  who  had  entered  the  iron 
business  with  sixty-five  hundred  dollars  came  out  of  it  a 
grizzled  veteran — the  richest  private  citizen  of  leisure  in 
the  world. 

He  was  a  lonely  little  figure  among  his  heaps  of  gold  bonds. 
Almost  all  his  early  friends  and  partners  were  dead.  He 
was  the  only  surviving  member  of  his  family.  Even  his 
brother,  the  easy-going  Tom,  had  died  fifteen  years  before. 
Against  Frick  and  Phipps  his  heart  was  as  hard  as  his  own 
armour-plate.  His  fellow  steel-makers  had  come  to  regard 
him  as  a  "  disturber  of  the  peace."  He  was  an  individualist — 
a  survivor  of  the  titanic  period,  when  great  steel  barons,  like 
Scottish  chiefs,  rallied  their  men  and  waged  war  upon  one 
another.  It  was  impossible  for  him  to  get  the  new  "commu- 
nity of  interest,"  idea,  which  was  dominating  the  iron  and 
steel  world.  He  was  the  "  last  of  the  barons,"  and  the  most 
influential  of  them  all. 

THE   SHOWER  OF   GOLD 

As  for  Carnegie's  forty  young  partners,  many  of  them  were 
for  a  time  money-mad.  A  few  have  never  recovered.  Their 
good  fortune  came  to  them  as  suddenly  as  a  flash  of  beneficent 
lightning.  They  did  not  climb  to  the  golden  heights.  They 
were  hurled  there.  Gasping  with  amazement,  they  were 
flung  into  the  possession  of  boundless  wealth.  Just  how  it 
happened  several  of  them  have  never  yet  been  able  to  under- 
stand. All  they  know  is  that  by  some  mysterious  stroke  of 
Carnegian  magic  two  hundred  million  dollars  came  legally 
into  their  possession. 

A  few  days  afterward,  one  of  these  young  partners,  slightly 
intoxicated,  was  seen  in  one  of  the  parlours  of  the  Duquesne 

193 


THE   ROMANCE   OF   STEEL 

Club,  earnestly  making  calculations  upon  a  sheet  of  paper. 
"What  are  you  trying  to  do,  Mr.  Blank?"  asked  one  of  the 
club  members.  "Why,"  replied  the  newly  made  Croesus, 
"  I'm  trying  to  see  whether  I'm  worth  seven  millions  or  ten 
millions,  and  how  in  the  deuce  I  got  it."  This  incident  shows 
exactly  the  predicament  of  at  least  thirty-five  out  of  the  forty, 
after  the  selling  of  the  Carnegie  company. 

Seven  of  the  partners  immediately  set  sail,  with  their  wives 
and  families,  for  Europe.  They  were  Carnegie,  Frick,  Lau- 
der,  Morrison,  Phipps,  Oliver,  and  Singer.  Another,  who 
had  spent  his  whole  life  in  a  steel-mill,  started  upon  a  tour 
of  the  world,  got  as  far  as  New  York,  became  homesick,  and 
returned  to  Pittsburgh. 

THE    PROFITS    OF    HENRY    W.    OLIVER 

Henry  W.  Oliver,  who  had,  like  Carnegie,  begun  a  busi- 
ness life  as  a  messenger  boy,  said  to  a  friend:  "  I  cleared  up 
thirteen  million  dollars  in  that  whole  Carnegie  deal."  For 
forty  years  his  estate  will  draw  four  hundred  thousand  dollars 
a  year  from  the  United  States  Steel  Corporation,  as  payment 
for  the  Oliver  ore  mines.  Having  succeeded  as  a  money- 
maker, Oliver,  who  was  wholly  unfitted  for  a  life  of  leisure, 
developed  two  new  ambitions — first,  to  become  the  Astor  of 
Pittsburgh,  and,  second,  to  succeed  Quay  as  United  States 
Senator  from  Pennsylvania.  At  the  time  of  his  death,  in 
1904,  he  owned  twelve  million  dollars'  worth  of  land  and 
buildings  in  the  down-town  section  of  Pittsburgh.  He  was 
also  the  possessor  of  four  of  the  city's  daily  papers,  and  a 
powerful  factor  in  State  politics.  And  so  the  man  who  had 
been  called  "flighty"  and  "unsafe"  brought  his  ship  safe 
into  the  golden  harbour  in  the  end,  after  passing  through  a 
few  shipwrecks  and  many  an  exciting  adventure.  He  took  a 
grim  pleasure,  in  the  last  few  years  of  his  life,  in  the  changing 
opinion  entertained  of  him  by  the  "  solid  men  "  of  Pittsburgh. 

194 


THE   HARVEST   OF   GOLD 

"  I  used  to  have  to  run  after  those  big  guns,"  he  said  to  a 
friend;  "but  now  they're  all  coming  after  me." 

Alexander  R.  Peacock  was  one  of  those  who  were  swept  off 
their  feet  by  the  sudden  flood  of  gold.  Henceforth,  for  him 
nothing  was  too  costly.  He  hunted  up  his  poor  friends  and 
paid  their  debts.  Naturally  open-handed,  he  now  spent 
money  with  the  abandon  of  an  emperor,  and  became  one  of 
the  most  picturesque  figures  in  Pittsburgh.  On  one  occasion 
he  was  in  San  Francisco  and  was  suddenly  wired  to  come 
East.  Hiring  a  "  Peacock  Special,"  he  dashed  from  the 
Pacific  Coast  to  Chicago  in  fifty-seven  hours  and  fifty-six 
minutes — a  record  that  was  not  broken  until  last  year,  when 
Walter  Scott's  "Death  Valley  Special"  is  said  to  have  run 
the  twenty-three  hundred  miles  in  forty-three  hours. 

Mr.  Peacock  built  a  dazzling,  showy  mansion  on  Highland 
Avenue,  Pittsburgh.  Encircling  the  spacious  grounds  of  Ro- 
wanlea  is  a  nine-foot  iron  fence,  entered  through  massive  gates 
that  roll  inward  on  wheels.  An  iron  lion  stands  threateningly 
upon  each  gate-post.  White  marble  columns,  alternately 
round  and  square,  and  palm  trees  growing  in  immense  urns, 
stand  about  the  doorway.  Within,  the  rooms  resemble  a  series 
of  magnificent  halls,  decorated  with  oriental  lavishness.  It  is 
the  dream  of  a  poor  young  linen  clerk  come  true.  Mrs.  Pea- 
cock is  constantly  putting  Rowanlea  to  hospitable  uses,  often 
for  charitable  purposes.  One  Schumann-Heink  matinee, 
given  for  the  benefit  of  a  hospital,  gleaned  no  less  than  six 
thousand  dollars  from  Pittsburgh's  affluent  "  Four  Hundred." 

MEN  WHf  TttK  FORTUNE  CALMLY 

Next  to  Rowanlea,  at  the  entrance  to  Highland  Park,  stands 
the  red  sandstone  palace  of  Thomas  Morrison,  who  had  be- 
gun his  swift  career  as  a  swarthy  workman  at  Homestead. 
Morrison  is  one  who  took  his  good  fortune  quietly,  and  al- 
lowed it  to  interfere  very  little  with  his  industrious  and  simple 

i95 


THE   ROMANCE   OF   STEEL 

habits.  He  is  a  typical  Pittsburgh  multimillionaire,  who 
loves  the  work  as  much  as  the  profit.  Mr.  Love  joy,  on  the  con- 
trary, after  building  a  million-dollar  home  and  the  finest  gar- 
age in  Pennsylvania,  suddenly  left  Pittsburgh  and  settled  in 
Denver,  investing  a  large  fraction  of  his  wealth  in  gold  mining 
— "  the  cleanest  business  in  the  world,"  as  he  tells  his  friends. 
His  first  business  venture,  after  receiving  his  share  of  the  steel 
millions,  was  the  erection  of  the  largest  apartment  house  in 
western  Pennsylvania.  It  was  built  in  too  costly  a  fashion  to 
be  a  financial  success,  as  Pittsburghers  have  not  yet  acquired 
the  New  York  habit  of  living  by  hundreds  under  one  roof. 
Mr.  Lovejoy  is  still  as  simple  and  unaffected  as  in  the  days 
when  he  drifted  up  and  down  the  oil  regions,  a  moneyless 
wage-worker. 

Other  Carnegie  partners  who  are  seldom  seen  in  the  city 
where  their  money  was  made  are  H.  C.  Frick,  Charles  M. 
Schwab,  James  Gayley,  Henry  Phipps,  W.  E.  Corey,  J.  G.  A. 
Leishman,  and  S.  L.  Schoonmaker.  Mrs.  Thomas  M.  Car- 
negie, who  drew  $6,198,500  out  of  the  grab-bag,  has  practi- 
cally deserted  the  Steel  City,  and  divides  the  year  between  her 
estate  at  Raquette  Lake,  in  the  Adirondacks,  and  an  island 
home  off  the  Florida  coast.  The  Carnegie  Building,  in  Pitts- 
burgh, belongs  to  her,  but  is  leased  to  the  Carnegie  Steel  Com- 
pany for  a  hundred  years,  at  a  rental  of  five  per  cent,  of  its  cost. 
Leishman,  who  forfeited  millions  by  becoming  a  consul-gen- 
eral, at  seven  thousand  five  hundred  dollars  a  year,  had  to  be 
content  with  a  pittance  of  about  four  hundred  and  fifty  thou- 
sand dollars.  A  Pittsburgher  who  visited  the  Leishman  resi- 
dence in  Berne,  told  when  he  returned  of  the  liveried  servant 
behind  each  plate,  and  the  general  tone  of  affluent  elegance 
in  the  home  of  the  ex-steel-maker,  who  began  life  as  a  bare- 
footed orphan  boy  in  the  murky  city  of  self-help.  Miss  Leish- 
man, it  is  well  known,  became  several  years  ago  the  Comtesse 
de  Gontaut-Biron. 

196 


FRANCIS    LYNDE    STETSON 


THE   HARVEST   OF   GOLD 

HOW    THE    MONEY    WAS    INVESTED 

Several  of  the  Carnegie  men,  with  less  confidence  in  the 
future  of  steel  than  their  chief,  promptly  sold  their  stock  and 
bought  real  estate,  or  invested  it  in  banks  and  trust  companies. 
The  steel  stock,  on  the  other  hand,  was  greedily  taken  by 
Pittsburghers,  who  seized  their  first  opportunity  to  become 
sharers  of  the  Carnegie  profits.  Generally  speaking,  the  buyers 
were  not  iron  and  steel  men,  as  it  was  the  current  belief  among 
them  that  Morgan  had  paid  an  absurdly  large  price  for  the 
plants.  And  so  there  was  a  sudden  readjustment  of  capital, 
which  brought  happy  days  to  the  Pittsburgh  stock-brokers. 
The  local  stock-exchange  was  transformed  from  a  quiet,  jog- 
trot little  institution  into  a  strenuous  nerve-centre  of  finance. 
A  mob  of  applicants  clamoured  at  its  doors  for  membership, 
until  thirty  were  admitted,  each  one  with  a  ten-thousand-dol- 
lar check  in  his  hand  as  an  entrance  fee. 

Real  estate  agents  also  shared  in  the  profits  of  the  golden 
jubilee.  The  Carnegie  men  bought  so  much  real  estate  that 
they  are  to-day  in  control  of  the  down-town  business  section  of 
Pittsburgh.  Frick  led  the  way  by  a  series  of  big  purchases, 
amounting  to  over  thirteen  million  dollars.  When  we  add 
to  this  the  value  of  the  manufacturing  sites  owned  by  him 
along  the  Monongahela  River,  his  three  million-dollar  hotels 
in  New  York,  his  costly  new  hotel  and  office  building  which 
are  now  being  built  in  Pittsburgh,  we  find  that  Frick  is  not 
only  the  real  estate  king  of  Pittsburgh,  but  one  of  the  leading 
landlords  of  the  world.  Next  to  Frick,  in  Pittsburgh,  came 
Henry  W.  Oliver  with  a  dozen  millions  in  land  and  buildings, 
and  Henry  Phipps  with  five  millions.  W.  W.  Blackburn  and 
James  Scott  invested  half  a  million  apiece.  The  others  were 
content  to  buy  residences  only. 


197 


THE    ROMANCE   OF   STEEL 

PITTSBURGH'S  REAL  ESTATE  BOOM 

This  sensational  investment  of  thirty-five  millions  or  more 
in  real  estate  sent  prices  and  rents  up  with  a  jump.  Nowhere, 
outside  of  New  York,  are  such  exorbitant  sums  asked  and 
given.  Real  estate  is  fully  three  times  higher  than  it  was  be- 
fore the  forming  of  the  United  States  Steel  Corporation.  On 
Fifth  Avenue  fifteen  thousand  dollars  a  front  foot  has  been 
offered  and  refused.  And  the  original  landowners  of  Pitts- 
burgh— the  Shanleys  and  the  Dennys — are  being  replaced  by 
men  who  get  the  acres,  not  by  the  favour  of  a  king,  but  by  the 
production  of  iron  and  steel. 

"  When  a  small  man  gets  rich  fast,  he  is  twice  as  bad  as  a 
grand  duke,"  say  the  Russian  peasants.  Generally  speaking, 
this  saying  does  not  apply  to  the  men  who  became  millionaires 
when  Carnegie  waved  his  magic  rod.  At  least  two-thirds  of 
them  continued  to  smoke  "  tobies  "  and  wear  the  harness  of 
business.  But  a  few  who  were  intoxicated  by  their  sudden  riches 
indulged  in  such  unique  freaks  of  extravagance  that  the 
whole  group  found  themselves  at  once  in  a  blaze  of  pub- 
licity. 

Pittsburgh  became  a  Klondike  for  artists,  book  agents,  curio 
dealers,  and  merchants  who  had  expensive  gewgaws  for  sale. 
One  New  York  firm  discovered  that  it  was  selling  goods  -to 
more  than  three  hundred  Pittsburgh  customers.  To  retain 
this  profitable  business  it  rented  a  magnificent  new  building 
in  Pittsburgh  for  ninety  thousand  dollars  a  year,  and  estab- 
lished a  branch  store.  Paintings  were  sold  by  the  dozen  and 
books  by  the  hundred.  Professional  decorators  reaped  a 
golden  harvest.  Prices  were  raised  at  the  theatres.  To  hear 
Bernhardt,  even  from  the  second  balcony,  cost  five  dollars. 
Families  paid  as  much  for  one  quart  of  champagne  as  they 
had  formerly  paid  for  a  hundred  and  twenty-five  quarts  of 
milk.  For  a  pound  of  Hamburg  grapes  men  gave  more  than 

198 


THE   HARVEST   OF   GOLD 

their  fathers  had  earned  in  a  week.  For  a  couple  of  French" 
apples  they  paid  the  price  of  a  pair  of  shoes.  And  for  one 
American  Beauty  rose  they  gave  as  much  as  a  week's  board 
had  cost  them  when  they  began  to  work  for  Carnegie. 

THE   CITY    OF    MAGICAL   GOOD    FORTUNE 

The  fame  of  Pittsburgh's  miraculous  millions  reached 
Europe,  and  attracted  scores  of  steel  men  and  engineers  across 
the  ocean.  One  man  who  heard  the  golden  news,  a  highly 
educated  Frenchman,  at  once  went  to  Pittsburgh  and  entered 
a  steel-mill  as  a  labourer,  having  heard  that  this  was  the  proper 
way  to  begin.  He  had  no  fortune  and  no  friends,  and  for  a 
time  was  lost  in  the  mob  of  workmen.  Then,  by  accident,  he 
was  discovered  to  be  a  man  of  culture  and  given  a  position 
as  tutor.  Being  the  possessor  of  rare  social  qualities,  the 
number  of  his  friends  increased  until,  he  reached  the  higher 
levels  of  society.  Pittsburgh  proved,  in  his  case,  at  least,  to 
be  the  city  of  magical  good  fortune  which  he  had  expected 
it  to  be. 

One  of  the  forty  young  partners  developed  the  habit  of 
entertaining  his  guests  by  giving  them  an  inventory  of  his 
household  goods.  "  See  that  painting! "  he  would  say.  "  Cost 
me  twenty-two  thousand  dollars ;  but  I  could  get  twenty-eight 
thousand  dollars  for  it.  Have  a  cigar.  Fine  brand.  Seventy- 
five  cents  apiece  wholesale.  Notice  that  chair  you're  on? 
Dealer  wanted  three  hundred  dollars  for  it,  but  I  beat  him 
down  to  two  hundred  and  fifty.  What  do  you  think  of  my 
wife's  necklace?  Had  to  give  up  a  quarter  of  a  million  to 
get  it."  This  same  exuberant  Croesus,  writing  a  note  of  intro- 
duction for  a  friend,  said:  "  I'll  back  this  man  for  millions." 
Money  became  his  passion — his  theme  by  day  and  his  dream 
by  night. 


199 


THE   ROMANCE   OF   STEEL 

THE  FADS  OF  THE  STEEL  MILLIONAIRES 

One  of  the  other  partners  developed  a  taste  for  an  expen- 
sive library,  which  made  him  the  easy  prey  of  book  agents. 
Another,  to  whom  politics  is  a  pastime,  lent  his  hundred-thou- 
sand-dollar residence  for  a  polling-place.  A  third  ordered 
a  special  brand  of  half-dollar  cigars  made  in  Cuba,  each 
with  his  name  and  coat  of  arms  on  the  wrapper.  A  fourth 
had  his  wife's  portrait  painted  by  every  obtainable  foreign 
and  American  artist.  A  fifth  spent  a  fortune  in  making  "  the 
finest  mushroom  cellar  in  America."  A  sixth  gladdened  his 
friends  by  gifts  of  automobiles.  A  seventh  had  eight  bath- 
rooms put  in  his  new  house,  so  that  he  would  have  three  more 
than  his  neighbour.  An  eighth,  when  he  received  a  twenty- 
five-dollar  fee  for  his  attendance  at  a  government  investiga- 
tion, tossed  the  money  airily  to  the  stenographer  and  said: 
"  Keep  it  or  give  it  to  your  church.  I  don't  want  it."  And 
several  paid  two  thousand  dollars  apiece  for  admission  to  a 
history  of  "  Famous  Americans." 

All  this  was  natural,  harmless,  and  "  good  for  business." 
The  Carnegie  partners  were  all  liberal  spenders.  There  was 
not  a  miser  in  the  group — not  one  who  valued  money  for 
money's  sake.  The  one  partner  who  came  the  nearest  to  being 
penurious  had  alternating  moods  of  extravagance  and  econ- 
omy. One  day  he  presented  the  city  with  a  hundred-thou- 
sand-dollar conservatory,  and  the  next  day  he  decided  that  he 
could  not  afford  a  fifteen-thousand-dollar  painting,  because, 
as  he  told  a  friend,  "  the  interest  on  fifteen  thousand  dollars 
would  be  two  dollars  a  day,  and  it  is  not  worth  two  dollars 
a  day  to  look  at  a  picture." 

Some  of  the  partners  would  have  been  wealthy  had  there 
been  no  Carnegie.  Such  men  as  Phipps,  Frick,  Schwab, 
Corey,  and  Gayley  inevitably  forge  to  the  front  in  any  set  of 
circumstances.  But  most  of  the  "  Carnegie  veterans,"  as  they 

200 


WILLIAM    E.    COREY 


THE   HARVEST   OF   GOLD 

call  themselves,  knew  well  that  they  owed  their  millions  to 
the  business  leadership  and  generosity  of  their  chief.  Under 
most  employers,  they  would  have  begun  and  ended  as  em- 
ployees— nothing  more.  Many  times  they  had  been  goaded 
almost  to  the  point  of  resigning  by  their  insatiable  master. 
But  they  had  persevered  and  been  rewarded.  One  of  the 
partners  in  the  sales  department  had  an  unusually  narrow 
escape  from  comparative  poverty.  He  had  made  a  serious 
blunder  in  drawing  up  a  contract,  several  years  before  the 
company  was  sold.  He  discovered  his  mistake  too  late  to 
have  it  rectified,  and  at  once  sat  down  and  wrote  his  resigna- 
tion. Taking  it  to  a  prominent  Pittsburgh  merchant,  who 
was  his  closest  friend,  he  said : 

"  I  want  you  to  read  this  over.  I've  made  a  bad  break  and 
I  don't  want  to  be  kicked  out  of  the  company.  I  find  I  can 
pull  out  with  seven  hundred  thousand  dollars,  and  that's  a 
deuced  sight  more  than  I  ever  expected  to  be  worth." 

The  merchant  read  the  resignation  and  then  deliberately 
tore  it  into  small  pieces. 

"  Blank,  you're  a  fool.  Go  back  to  your  office  and  hang  to 
your  desk  with  both  hands." 

Blank  took  his  friend's  advice,  and,  by  some  accidental 
oversight,  entirely  escaped  punishment  for  his  carelessness. 
To-day  his  house  alone  is  worth  seven  hundred  thousand  dol- 
lars; and  when  Mr.  Carnegie  reads  these  lines  he  will  hear 
for  the  first  time  how  nearly  he  came  to  losing  one  of  his 
"young  geniuses." 

And  so,  as  the  twentieth  century  dawned,  the  sun  of  the 
Carnegie  company  set  in  a  blaze  of  golden  glory.  When  it 
arose,  about  twenty-eight  years  before,  Great  Britain  was 
making  three  times  as  much  steel  as  the  United  States;  when 
its  busy  day  was  ended,  the  United  States  was  making  twice 
as  much  steel  as  Great  Britain.  Remembering  that  Great 
Britain's  product  had  increased  eight-fold,  it  becomes  evi- 

201 


THE   ROMANCE   OF   STEEL 

dent  that  industrial  history  can  show  nothing  comparable  to 
this. 

The  partners  have  organised  a  most  remarkable  society — 
the  "  Carnegie  Veterans."  Once  a  year  they  meet  at  the  home 
of  the  "  little  boss."  Stories  are  told;  mistakes  are  rubbed  in 
and  laughed  at;  and  the  whole  wonderful  epic  of  their  adven- 
tures is  celebrated  in  a  reminiscent  festival.  They  were  lucky, 
and  they  know  it,  to  have  won  both  fortune  and  friendship  in 
the  making  of  steel;  and  they  stand  pledged  to  meet  once  a 
year  until  the  last  man  dies. 

THE   PHIPPS   AND    FRICK    FAMILIES 

Of  the  ex-Carnegians  who  continue  to  draw  millions  from 
steel,  Phipps  spends  his  ten  thousand  dollars  a  day  in  travel- 
ling in  Europe  and  Mexico.  Having  married  one  of  his 
daughters  to  a  rich  American  and  the  other  to  the  younger 
son  of  an  English  peer,  he  has  turned  his  attention  somewhat 
to  the  problems  of  the  working  classes.  One  of  his  millions 
is  to  be  spent  in  New  York,  building  "  model  tenements,"  and 
it  is  expected  that  other  millions  are  to  follow.  Iron  and 
steel  workers  have  wondered  why  these  tenements  are  not  to 
be  built  in  Homestead  and  Braddock,  or  to  replace  the 
wooden  shacks  of  the  ore  miners  in  the  Lake  Superior  region. 

Frick,  unlike  Phipps,  is  still  busy.  He  will  never  be  any- 
thing else,  unless  he  undergoes  a  chemical  transformation. 
He  is  the  real  estate  king  of  Pittsburgh.  He  is  the  chief 
adviser  of  the  United  States  Steel  Corporation.  He  is  the 
umpire-in-chief  in  many  a  political  and  financial  dispute. 
In  his  own  business  affairs,  he  has  half  a  dozen  ways  of 
becoming  too  rich.  From  steel,  coke,  real  estate,  apartment 
hotels,  speculation  in  railway  stocks,  and  from  trust  com- 
panies, he  could  have  to-day  a  yearly  pension  of  three  millions 
if  he  chose  to  retire  and  become  a  looker-on.  He  and  his 

202 


THE   HARVEST   OF   GOLD 

family  have  joined  the  Pittsburgh  colony  in  New  York. 
Their  present  home  is  the  George  W.  Vanderbilt  house  on 
Fifth  Avenue,  which  Frick  has  leased  for  ten  years.  It  is  one 
of  the  famous  "twin  Vanderbilt  mansions"  built  a  genera- 
tion ago.  And  so  Henry  Clay  Frick,  who  was  living  in 
half  of  a  coal  miner's  cottage  thirty-three  years  ago,  finds 
himself  to-day  the  welcome  occupant  of  a  Vanderbilt  palace. 
Few  of  the  self-made  steel  kings  are  allowing  their  chil- 
dren to  be  as  hardy  as  themselves.  Judge  Moore  is  trying  to 
induce  his  son  to  climb  the  railroad  ladder  by  making  him  a 
freight  clerk  in  a  small  town.  The  boy  gets  fifty  dollars  a 
month  and  no  allowance.  Up  to  this  time  of  writing  he  has 
tightened  up  his  hunger-belt  and  persevered;  but  he  gets  even 
with  his  parents  by  sending  every  day  the  menu  of  his  board- 
ing-house. Another  steel  millionaire  put  his  son  in  Morgan's 
office  at  a  salary  of  ten  dollars  a  week.  But  as  the  boy  goes 
to  his  work  every  day  in  a  twenty-two-thousand-dollar  auto- 
mobile, he  is  not  probably  vividly  conscious  of  being  a  pro- 
letarian. 

CARNEGIE'S  MAGNIFICENT  PENSION 

As  for  Andrew  Carnegie,  the  grand  old  pensioner  of  steel, 
he  has  as  least  the  second  largest  fortune,  and  perhaps  the 
most  secure  one  in  the  United  States.  His  pension,  including 
the  amount  that  goes  to  his  charities,  is  about  thirteen  million 
seven  hundred  and  fifty  -thousand  dollars  a  year — a  daily 
allowance  of  more  than  forty-four  thousand  dollars — ninety- 
two  dollars  every  time  the  clock  ticks  off  a  minute,  allowing 
that  he  is  paid  on  the  basis  of  an  eight-hour  day.  "  Hurrah! 
I  am  out  of  business,"  he  said  in  1901.  Yet  he  is  still  the  great- 
est profit-taker  of  them  all.  Out  of  every  dozen  dollars  of 
gain  in  the  American  steel  trade,  one  goes  to  the  laird  of  Skibo. 
The  golden  pay-car  of  the  Steel  Trust  shovels  out  as  much 
to  this  one  man  as  to  fourteen  thousand  of  its  Pittsburgh  work- 

203 


THE    ROMANCE   OF   STEEL 

men.  His  pension  would  support  a  city  as  large  as  Lynn  or 
Bridgeport.  In  fact,  when  we  consider  the  enormous  wealth 
of  Carnegie,  he  ceases  to  be  an  individual.  He  becomes  one 
of  the  financial  institutions  of  the  United  States. 

"  I  don't  say  that  Carnegie  has  made  money  commoner," 
said  one  of  the  oldest  and  most  reflective  of  the  forty  partners. 
"  But  he  has  put  more  commonness  into  the  idea  of  money 
than  any  man  that  ever  lived."  This  remark  may  be  taken 
as  representing  the  final  opinion  of  Pittsburgh. 

Such  a  feat  as  Carnegie  had  accomplished  was  unknown, 
both  among  the  facts  and  the  fairy  tales  of  history.  He  and 
his  two-score  partners  had  started  out  upon  the  road  of  busi- 
ness as  a  group  of  barefooted  urchins;  and  before  their  aver- 
age age  was  more  than  forty  they  were  richer  than  the 
hereditary  rulers  of  the  Old  World.  Compared  with  the  Car- 
negie millions,  the  wealth  of  the  French  court,  under  the 
"  ancient  regime,"  was  a  bagatelle.  In  his  most  wasteful  year, 
Louis  IX.  spent  less  than  eight  hundred  thousand  dollars. 
The  luxurious  Francis  I.  could  have  maintained  himself  and 
his  whole  court  for  more  than  a  thousand  years  on  the  amount 
of  money  which  fell  to  Carnegie  alone  as  his  personal  share. 
Louis  XIV. — the  most  successful  of  all  the  royal  plunderers 
of  those  earlier  days — had  less  than  four  millions  a  year  to 
squander  on  himself  and  his  entire  retinue. 

NEW  STANDARDS  OF  WEALTH 

Pittsburgh,  in  the  Carnegian  era,  established  new  standards 
of  wealth.  It  made  the  mere  millionaire  a  back  number.  It 
drowned  all  records  of  affluence  in  a  sudden  deluge  of  scores 
of  millions.  It  yielded  to  the  masterful  few — men  without 
rank  or  learning  or  privilege — a  sum  total  which  had  never 
been  equalled  in  the  long  history  of  the  human  race.  It  piled 
up  for  them  a  store  of  riches  so  vast  as  to  be  proof  against  all 

204 


THE   HARVEST   OF   GOLD 

spending — so  practically  infinite  as  to  defy  the  unparalleled 
benevolence  of  Carnegie  and  the  wildest  extravagance  of  his 
young  partners. 

What  Andrew  Carnegie  has  done  is  marvellous.  But  more 
wonderful  still  is  the  fact  that  he  has  done  it  all  so  easily  and 
incidentally.  "  I  never  found  my  business  anything  more 
than  mere  play,"  he  said.  "  Golf  is  the  only  serious  business 
of  life."  His  conversation  sparkles  with  contemptuous  ref- 
erences to  wealth.  "  It's  worth  ten  thousand  dollars  to  make 
a  drive  like  that"-— "Making  one  hundred  thousand  dollars 
is  nothing  to  the  sport  of  landing  a  monster  pickerel" — "If 
I  had  my  life  to  live  over  again,  I  would  prefer  to  be  a 
librarian  "  — "  I  would  give  all  the  millions  I  own  and  all  I 
could  get  credit  for,  if  I  could  only  be  a  boy  again." 

He  has  never  allowed  the  great  things  of  life  to  put  him 
out  of  touch  with  the  small  things — one  of  the  rarest  of  quali- 
ties. He  has  been  almost  everywhere  and  seen  almost  every- 
thing, and  yet  he  is  the  least  blase  man  in  the  world.  He  has 
lived  for  twenty-six  thousand  days,  and  yet  every  hour  is  as 
fresh  and  vivid  as  it  was  in  his  boyhood.  "  Millionaires  who 
laugh  are  rare,"  he  said  on  one  occasion;  but  he  is  as  care-free 
and  buoyant  as  a  child,  and  always  has  been.  No  one  could 
have  less  of  the  menacing  dignity  which  is  usually  supposed 
to  be  a  characteristic  of  great  men. 

CARNEGIE'S  DEMOCRATIC  HABITS 

Last  summer,  while  visiting  his  sister-in-law  in  the  South, 
he  was  bossed  most  unmercifully  by  his  caddie — a  little  darky 
with  about  eleven  years  to  his  credit. 

"Now,  Mr.  Cahngy,"  his  young  tyrant  would  say,  "don't 
you  go  to  do  dat.  You's  all  wrong!  Don't  you  see  you  got  a 
brassie?  It's  a  mashie  dat  you  want  to  make  dat  dar  hit. 
Hoi'  on  till  I  gib  you  de  right  stick." 

205 


THE    ROMANCE   OF    STEEL 

And  Mr.  Carnegie  would  meekly  reply,  "All  right,  Joe, 
I  suppose  you  know  best,"  and  exchange  his  brassie  for  a 
mashie. 

Two  amazing  things  Carnegie  accomplished:  he  acquired 
a  quarter  of  a  billion  dollars  in  a  lifetime,  and — he  retained 
possession  of  himself.  He  carries  the  wealth  of  a  city  easier 
than  many  a  man  can  carry  the  price  of  a  suit  of  clothes. 
Whatever  faults  he  has,  they  are  not  those  of  his  class. 
He  owns  millions — hundreds  of  them — and  pays  no  penalty. 
He  is  still  as  simple,  as  democratic,  as  congenial,  as  when  he 
was  struggling  with  his  debts  in  the  early  Pittsburgh  days. 
He  smokes  never — drinks  seldom — detests  fashionable  society 
—abhors  starched  clothes — abominates  gambling  and  all 
games  of  chance.  He  travels,  but  in  no  private  car.  He 
attends  grand  opera,  but  has  no  box.  Of  all  the  money  kings, 
not  one  spends  so  much  on  others  and  so  little  on  himself. 
He  forced  his  way  over  obstacles  with  the  obstinacy  of  a  steel 
wedge — not  on  the  smooth  pathway  of  consolidation  and 
"community  of  interest,"  but  in  the  jungle  of  competition; 
yet  he  remained  from  first  to  last  a  man  of  the  widest  inter- 
ests. Commerce  could  never  make  him  one  of  its  automata. 
To  a  degree  which  has  never  been  surpassed,  he  has  always 
been  "  the  captain  of  his  soul." 

His  English  friend,  W.  T.  Stead,  who  is  a  connoisseur  of 
celebrities,  has  sketched  him  as  a  sort  of  cheerful,  shrewd 
Marcus  Aiirelius,  living  far  above  the  cares  and  prejudices 
of  other  men.  Our  only  authentic  description  of  Mrs.  Car- 
negie is  given  to  us  by  Stead.  "  Mrs.  Carnegie  is  a  home- 
maker,"  he  writes.  "  She  is  skilful  in  that  larger  housekeep- 
ing which  makes  a  harmonious  household." 

"All  that  you  can  say  of  me,"  said  Mrs.  Carnegie  to  Stead, 
"  is  that  I  am  the  unknown  wife  of  a  very  well-known  man." 
"  But  you  must  add,"  said  Carnegie,  "  that  she  is,  nevertheless, 
the  power  behind  the  throne."  Mr.  Carnegie  met  his  wife, 

206 


THE   HARVEST   OF   GOLD 

who  was  then  Miss  Louise  Whitfield,  of  New  York,  on  a 
coaching  tour.  It  was  love  at  first  sight,  but  they  postponed 
their  marriage  until  1887.  Their  one  daughter,  Margaret, 
will  be  the  richest  heiress  in  the  world. 

ADMIRATION    OF    GREATNESS    IN    OTHERS 

One  evidence  of  true  greatness  in  Carnegie  is  his  admira- 
tion of  greatness  in  others.  He  has  always  been  a  man  of 
heroes.  Herbert  Spencer  as  a  philosopher,  John  Morley  as  a 
literary  man,  B.  F.  Jones  as  a  steel-maker,  and  Abram  S. 
Hewitt  as  a  citizen,  are  his  ideals.  "To  discover  the  excep- 
tional man"— this,  he  said,  should  be  the  object  of  the 
Carnegie  Institution,  to  which  he  gave  ten  millions.  He 
believes  that  the  finished  product  of  a  college  should  be  the 
man  of  power  rather  than  the  man  of  polish.  On  one  occa- 
sion he  replied  eloquently  to  Sir  Edwin  Arnold,  who  had 
declared  that  a  knowledge  of  Greek  and  Latin  was  indis- 
pensable to  a  writer's  education. 

"What?"  exclaimed  Carnegie.  "Did  not  Burns  and 
Shakespeare  write  well  enough  without  Latin  and  Greek? 
The  writers  of  the  modern  world  must  deal  with  facts,  with 
realities,  not  with  neat  phrases."  At  another  time,  when  con- 
versing with  Lord  Reay,  he  said:  "A  man  with  a  university 
education  is  a  man  lost  to  commerce.  He  had  better  begin 
business  at  eighteen  than  spend  three  or  four  years  in  a  uni- 
versity, studying  old  ruffians  who  lived  two  thousand  years 
ago.  Studying  skirmishes  among  savages  in  the  classics  is 
no  preparation  for  a  man  going  into  the  steel  or  coal  trade. 
He  might  as  well  learn  Choctaw." 

THE   IDEA   LARGER   THAN   THE   DOLLAR 

To  Andrew  Carnegie  the  Idea  has  always  been  larger  than 
the  Dollar.  "  I  do  not  believe  that  any  very  rich  man  ever 

207 


THE    ROMANCE   OF    STEEL 

lived  before  him  with  so  much  and  such  genuine  enthusiasm 
for  literature  as  Andrew  Carnegie,"  writes  Moncure  D.  Con- 
way.  While  securing  information  from  Mr.  Carnegie  for 
this  story  of  steel,  I  discovered  in  the  first  quarter  of  an  hour 
that  he  is  prouder  of  his  authorship  than  his  ownership- 
more  pleased  that  his  "Empire  of  Business"  has  been  trans- 
lated into  Greek  and  Japanese  than  that  his  pension  amounts 
to  forty-four  thousand  dollars  a  day. 

The  story  of  his  charities  is  in  itself  a  book.     Hastily 
summed  up,  they  may  be  classed  as  follows : 

Fourteen  hundred  libraries $42,000,000.00 

Fifty-one  colleges    10,000,000.00 

Carnegie  Institution    10,000,000.00 

Carnegie  Foundation    (pensions   for   re- 
tired professors)    10,000,000.00 

Carnegie  Relief  Fund    4,000,000.00 

Carnegie  Hero  Fund 5,000,000.00 

Scotch  Universities 10,000,000.00 

Pittsburgh  Technical  Schools 10,000,000.00 

The  Hague  Temple  of  Peace 1,500,000.00 

New  York  Engineers'  Club 1,000,000.00 

Pittsburgh  Museum  of  Art 2,000,000.00 

Donations  promised    (according  to   Sec- 
retary's book)    1 7,000,000.00 


Grand  Total   $122,500,000.00 

And  every  dollar  of  it  made  from  steel. 


208 


('.jpyriyht,  1J02,  by  Parft  Bros.,  New  York. 

J.    PIERPONT    MORGAN 


CHAPTER  VII 

J.   PIERPONT   MORGAN   AND  THE  UNITED 
STATES   STEEL  CORPORATION 

The  Great  Era  of  Consolidation — How  Two-Thirds  of  the  Most  Profitable 
American  Industry  Was  Organised,  Under  Morgan's  Leadership,  into 
the  Biggest  of  the  World's  Corporations — The  Dramatic  Career  of 
John  W.  Gates,  and  the  Personalities  of  Perkins,  Gary,  and  other  New 
Powers  in  the  World  of  Steel. 

IN  the  early  spring  of  1901  J.  Pierpont  Morgan  strode 
among  the  steel  kings  like  a  beneficent  giant.    Two  years 
before,  he  had  refused  to  become  the  overlord  of  the 
iron  world;  but  several  things  had  happened  since  that  time. 
He  was  now  to  a  large  extent  a  steel  king  himself.     He  had 
successfully  organised  the  Federal  Steel  Company.     He  was 
a  heavy  stockholder  in  the  National  Tube  and  the  American 
Bridge  Companies.     Moreover,  his  intimacy  with  Frick  had 
given  him  a  better  knowledge  and  a  more  favourable  impres- 
sion of  the  steel  men. 

Besides,  at  the  present  crisis,  his  own  life-work  was  in  dan- 
ger. For  more  than  thirty  years  Morgan  had  been  a  builder 
and  a  peacemaker.  He  was  the  most  implacable  foe  of 
hostility  among  capitalists.  He  was  the  champion  of  "  team 
play"  and  ''community  of  interest." 

From  his  point  of  view,  therefore,  the  exit  of  Carnegie  was 
a  business  necessity.  Carnegie  was  preparing  to  parallel  the 
Pennsylvania  Railroad  and  to  compete  with  the  National 
Tube  Company,  both  of  which  were  in  Morgan's  "  sphere  of 
influence."  To  permit  such  a  man  to  control  the  steel  market 
was  unthinkable. 

209 


THE    ROMANCE   OF    STEEL 

From  a  business  standpoint,  Carnegie  was  invulnerable. 
He  had  his  own  ore,  coal,  railroads,  steamships,  and  steel- 
mills.  In  his  commercial  and  personal  interests,  he  stood 
entirely  outside  all  associations  of  capitalists.  He  enjoyed  to 
the  full  what  his  Scottish  poet  called  "the  glorious  privilege 
of  being  independent."  It  was  an  amazing  feat  to  win  a 
place  absolutely  alone  in  an  age  of  interdependence — when 
even  the  nations  were  clinging  one  to  another  for  support; 
but  as  a  factor  in  the  business  situation  his  position  was  not  to 
be  tolerated.  The  stability  and  peace  of  mind  of  the  Ameri- 
can financial  world  demanded  that  Andrew  Carnegie  should 
abdicate  his  throne. 

THE  PERSONALITY  OF  J.  P.   MORGAN 

John  Pierpont  Morgan  was  at  this  time  a  veteran  of  sixty- 
four,  the  scarred  victor  of  a  hundred  battles.  Through  his 
father — a  famous  banker,  a  partner  of  the  great  George  Pea- 
body — he  was  descended  from  Captain  Miles  Morgan,  the 
gallant  soldier  who  defended  Springfield  against  the  Indians 
in  1675;  through  his  mother  he  inherited  the  blood  of  John 
Pierpont,  the  poet,  whose  name  he  bears,  and  of  James  Pier- 
pont, the  New  England  clergyman  who  helped  to  found  Yale, 
and  whose  daughter  married  Jonathan  Edwards.  Born  in 
Hartford,  and  schooled  in  Boston  and  at  the  German  university 
of  Gottingen,  his  training  as  a  banker  began  before  he  was 
twenty-one,  and  every  step  of  his  career  had  been  from  smaller 
to  greater  things.  In  1901  the  house  of  Morgan  was  commonly 
said  to  represent  eleven  hundred  million  dollars — perhaps 
more.  Its  head  was  justly  regarded  as  a  financial  Colossus. 
In  fact,  he  had  become  almost  more  than  a  man — he  was  a 
British-American  institution.  Many  a  time  he  had  come  to 
the  rescue  of  Wall  Street,  pulled  it  out  of  a  slough  of  panic, 
and  replaced  it  upon  the  main  road  of  speculation.  More 

210 


MORGAN  AND  U.  S.  STEEL  CORPORATION 

than  once  he  had  given  good-natured  assistance  to  the  United 
States  Government,  and  saved  it  from  the  fear  of  penury  by 
purchasing  its  bonds. 

He  was  a  man  to  whom  transactions  of  ordinary  size  seemed 
petty.  For  any  sum  of  less  than  seven  figures  he  had  little 
respect.  In  the  previous  fifteen  years  he  had  reorganised 
eight  railroads,  floated  an  American  bond  issue  of  two  hundred 
million  dollars  and  a  British  war  loan  of  ten  million  pounds, 
harmonised  the  warring  coal  operators,  and  converted  the 
Mexican  national  debt.  No  man  aroused  more  fear  or  higher 
respect  in  Wall  Street.  No  one  was  so  terribly  masterful 
as  he.  Like  Luther,  when  he  spoke  "  his  words  were  half 
battles."  To  anger  him  was  to  brave  the  rage  of  an  incar- 
nate Bessemer  converter.  In  whatever  group  he  sat,  he 
dominated  those  around  him  as  if  he  were  the  ruler  of  a 
constellation  of  worlds  instead  of  a  mere  inhabitant  of  a 
single  planet. 

BUILDING  THE  GREAT  CORPORATION 

Morgan  rushed  at  his  work  like  a  Titan  who  had  at  last 
found  a  task  worthy  of  his  strength.  At  first  his  plan  was 
to  combine  only  four  companies — the  Carnegie,  the  Federal 
Steel,  the  National  Tube,  and  the  American  Steel  and  Wire. 
But  a  quick  survey  of  the  field  showed  him  that  four  other 
companies  would  be  easy  to  persuade  into  the  confederation — 
the  National  Steel,  the  American  Tin  Plate,  the  American 
Steel  Hoop,  and  the  American  Sheet  Steel;  while  if  these 
concerns  were  left  out,  they  might  offer  an  inconveniently  actv 
ive  competition. 

Frick  hurried  to  Pittsburgh  and  offered  about  thirty  mil- 
lion dollars  for  the  big  Jones  &  Laughlin  plant,  but  was  re- 
fused. On  his  return  he  found  that  Morgan  had  been  trying 
to  make  terms  with  John  D.  Rockefeller,  Jr.,  for  the  purchase 

211 


THE    ROMANCE   OF    STEEL 

of  the  Rockefeller  ore  mines.  The  negotiations  had  come  to  a 
standstill.  For  several  days  it  appeared  as  if  the  powerful 
Standard  Oil  group  would  be  left  outside  of  the  steel  com- 
bination. 

To  break  the  deadlock,  Henry  H.  Rogers  suggested  that 
Frick,  who  is  a  better  buyer  than  Morgan,  be  sent  to  Rocke- 
feller. This  expedient  was  tried  and  succeeded  completely. 

"  I  gave  Rockefeller  forty  million  dollars  in  preferred 
stock,"  said  Frick,  "  and  forty  millions  in  common,  for  his 
ore.  For  his  ore-carrying  fleet  I  paid  him  eight  and  a  half 
millions  in  cash.  We  needed  the  Rockefeller  property,  for 
without  those  rich  ore  tracts  we  should  have  been  in  a  vul- 
nerable position." 

In  this  way  the  United  States  Steel  Corporation  obtained 
about  two-fifths  of  its  ore  and  nearly  one-half  of  its  ore  fleet. 

The  speed  with  which  the  great  structure  was  built  is  almost 
incredible.  Schwab  had  secured  Carnegie's  selling  price  in 
January,  1901,  and  by  February  25  the  corporation  had  taken 
definite  shape.  According  to  its  New  Jersey  charter,  its  pur- 
pose was  practically  to  manage  the  business  of  the  human  race 
—to  own  and  operate  the  whole  world,  with  the  sole  exception 
of  the  railroads  and  canals  of  New  Jersey.  Its  actual  capital 
was  declared  to  be  three  thousand  dollars,  which  it  had 
power  to  increase.  Its  three  nominal  incorporators  were  men 
who  were  comparatively  unknown.  Its  life  was  to  be  "  for- 
ever." All  this,  however,  was  only  the  formal  and  legal  way 
of  making  a  beginning. 

On  the  following  day  the  fog  of  rumour  was  dispelled  by 
an  official  announcement  from  Mr.  Morgan's  banking-house. 
Next  came  his  advertisement  for  the  stock  of  the  smaller 
shareholders  in  the  companies  that  were  to  be  absorbed.  It 
was  signed  by  about  forty  well-known  names.  Each  one 
represented  millions.  Some  could  speak  not  for  themselves 
alone,  but  for  whole  cities.  Among  them  were : 

212 


MORGAN  AND  U.  S.  STEEL  CORPORATION 

J.  Pierpont  Morgan  and  his  partners,  Charles  Steele  and 
Robert  Bacon. 

H.  H.  Rogers  and  Daniel  O'Day,  of  the  Standard  Oil. 

Marshall  Field,  John  W.  Gates,  H.  H.  Porter,  John  A. 
Drake,  E.  H.  Gary,  William  H.  Moore,  J.  H.  Moore,  and 
Norman  B.  Ream,  of  Chicago. 

P.  A.  B.  Widener  and  Thomas  Dolan,  of  Philadelphia. 

Samuel  Mather,  of  Cleveland. 

Nathaniel  Thayer,  of  Boston. 

D.  O.  Mills,  Samuel  Spencer,  William  Nelson  Cromwell, 
and  A.  R.  Flower,  of  New  York,  with  more  than  a  dozen 
others. 

Morgan  peremptorily  announced  that  all  stock  of  the  com- 
panies going  into  the  trust  must  be  in  his  hands  in  eighteen 
days.  But  the  minds  of  the  small  stockholders  did  not  work 
with  Morganic  swiftness,  and  he  was  obliged  to  give  them 
twelve  days  longer.  By  April  2,  however,  Morgan's  greatest 
task  was  accomplished.  The  corporation  which  is  his  financial 
masterpiece — by  which  his  reputation  will  stand  or  fall — was 
complete.  Its  capital  was  fixed  at  a  little  more  than  a  billion 
dollars,  besides  three  hundred  and  sixty-six  millions  of  bonded 
and  mortgage  debt.  The  stock,  half  seven-per-cent.  preferred 
and  half  common,  was  being  sold  to  a  greedy  public. 

Seventy  per  cent,  of  the  American  iron  and  steel  industry 
had  been  organised.  More  than  that,  it  had  become  Morgan- 
ised ;  it  had  been  put  together  on  "  community  of  interest " 
lines.  Instead  of  being  cut  apart  .from  other  branches  of 
business  and  dominated  by  one  man,  it  was  now  linked  to  a 
dozen  banks,  a  score  of  railroads,  and  an  unknown  number  of 
other  corporations. 

THE   MEN   IN  CHIEF  COMMAND 

Its  officials  and  directors  were  not  steel-makers.  Less  than 
a  third  of  them  understood  the  language  of  steel.  Schwab, 

213 


THE   ROMANCE   OF   STEEL 

a  practical  steel  man,  had  been  made  president  at  the  request  of 
Carnegie;  but  in  the  management  of  the  corporation  the  presi- 
dent ranked,  not  first,  but  third.  Judge  Elbert  H.  Gary  was 
first,  as  head  of  the  executive  committee;  and  Robert  Bacon 
—who  was  succeeded,  a  little  later,  by  George  W.  Perkins- 
was  second,  as  head  of  the  finance  committee.  Strictly  speak- 
ing, the  president  was  merely  the  head  of  the  manufacturing 
department.  Gary  was  a  lawyer,  Bacon  a  banker,  Perkins  an 
insurance  man. 

The  United  States  Steel  Corporation  was  a  financial  even 
more  than  a  manufacturing  organisation.  It  was  first  for 
money  and  second  for  steel.  This  was  a  new  and  important 
development  in  the  evolution  of  the  steel  business.  On  its 
board  of  directors  was  only  one  steel-maker  of  the  old-fash- 
ioned sort,  Abram  S.  Hewitt,  and  he  entered  unwillingly.  To 
his  mind  a  billion-dollar  corporation  was  a  dangerous  innova- 
tion. The  modern  steel-maker  was  typified  in  H.  C.  Frick; 
the  others  were  men  who  had  evolved  into  financiers  from  all 
sorts  of  beginnings. 

More  than  half  of  the  officials  and  directors  were  self-made 
men.  The  three  who  stood  foremost — Gary,  Perkins,  and 
Schwab — had  climbed  from  the  ladder's  lowest  rung.  They 
were  young  men.  The  average  age  of  the  officials  was  forty- 
eight,  the  oldest  being  fifty-five  and  the  youngest,  Charles 
M.  Schwab,  thirty-nine.  For  their  services  in  managing  the 
immense  corporation,  Schwab  and  Gary  drew  salaries  of  a 
hundred  thousand  dollars  apiece.  Perkins  received  nothing. 

"  Mr.  Morgan  would  not  permit  him  to  get  a  salary,"  said 
Judge  Gary. 

It  has  often  been  stated  that  Morgan  himself  received  a 
huge  fee  for  his  successful  work  in  effecting  the  consolidation. 
As  a  matter  of  fact,  he  received  no  direct  payment  whatever. 
He  held  a  one-fifth  interest  in  a  syndicate  that  floated  two  hun- 
dred millions  of  the  company's  securities,  and  his  total  profits 


ABRAM    S.    HEWITT 


MORGAN  AND  U.  S.  STEEL  CORPORATION 

were  less  than  three  millions.  "  High  pay  for  a  few  months' 
work,"  the  outsider  may  say;  but  he  should  remember  the 
magnitude  of  the  achievement  and  the  vast  responsibilities  that 
Morgan  had  to  bear — and  still  bears,  to  a  great  extent,  so 
closely  does  the  public  identify  him  with  the  fortunes  of  his 
greatest  financial  creation. 

"  Morgan  was  big  and  fair  and  square,"  says  Schwab. 

"  No  man,  no  number  of  men,  outside  of  Mr.  Morgan, 
could  have  formed  the  United  States  Steel  Corporation  at  that 
time,"  declared  Judge  Gary. 

Another  New  York  financier,  in  an  outburst  of  enthusiasm, 
exclaimed; 

"  I  believe  that  in  the  next  twenty  years  a  statue  of  J.  Pier- 
pont  Morgan  will  be  placed  in  some  public  square,  to  mark 
the  general  appreciation  of  his  wonderful  organising  ability." 

In  the  consolidation  of  businesses  it  has  been  found  that  the 
services  of  a  company-promoter  are  indispensable.  A  business 
man  naturally  dislikes  to  sell  to  his  competitor.  He  prefers 
to  deal  with  an  outsider. 

"  Every  manufacturer  imagines  that  his  plant  is  better  lo- 
cated and  better  managed  than  his  neighbour's,"  says  W.  H. 
Moore,  who  is,  next  to  Morgan,  the  most  successful  consoli- 
dator  in  the  steel  industry.  Whether  Morgan's  reward  was 
fair  or  exorbitant  can  best  be  told  by  making  a  closer  examina- 
tion of  the  work  which  he  performed. 

AN   IMPRESSIVE  NAVAL  REVIEW 

To  escape  from  its  bewildering  statistics,  let  us  imagine  that 
the  United  States  Steel  Corporation  is  a  combination  of  the 
navies  of  the  world.  Let  us  suppose  that  we  are  standing 
upon  some  lofty  promontory  where  we  can  see  the  mighty 
fleet  pass  in  review  before  us.  It  consists  of  two  hundred  and 
thirteen  squadrons,  some  with  few  vessels  and  some  with  many. 

215 


THE   ROMANCE   OF   STEEL 

After  years  of  warfare,  these  squadrons  were  organised  into 
eight  powerful  navies;  and  now,  finding  that  it  is  better  to 
combine  than  to  compete,  they  have  decided  to  come  together 
under  one  admiral  and  one  flag. 

Leading  the  way  come  the  Carnegie  war-ships,  the  most 
formidable  steel  navy  in  the  world.  Admiral  Schwab  stands 
on  the  deck  of  his  flag-ship  Homestead,  and  on  either  side 
steam  the  battle-scarred  leviathans  Duquesne  and  Edgar 
Thomson.  It  was  this  Edgar  Thomson  which,  twenty  years 
ago,  defeated  the  proud  champions  of  Great  Britain  and  es- 
tablished American  supremacy.  One  of  these  towering  ves- 
sels is  forty-three  years  old;  but  every  one  of  them  is  in  first- 
class  fighting  trim.  There  are  no  hulks,  no  slow  or  unsea- 
worthy  craft,  and  there  are  forty-five  thousand  men  behind 
the  guns.  The  pay-roll  of  this  one  fleet  is  fifteen  million  dol- 
lars a  year.  It  is  practically  thirty  fleets  under  one  control. 
On  the  deck  of  the  Edgar  Thomson  is  a  tiny  figure  which  can 
scarcely  be  distinguished  with  a  strong  field-glass.  That  little 
man,  you  are  told,  is  Andrew  Carnegie,  the  owner  of  the  fleet. 

Next  comes  the  Federal  Steel  navy,  commanded  by  Admiral 
Elbert  H.  Gary.  The  first  vessel  of  this  fleet  was  launched 
in  1857,  at  Detroit,  by  Captain  Ward.  In  its  day  it  had  no 
superior,  and  in  1901  it  is  still  one  of  the  largest  afloat.  Its 
equipment  is  not  strictly  first-class,  but  it  carries  a  vast  amount 
of  ammunition.  Its  older  vessels  have  weathered  many  a  storm 
and  passed  through  many  a  battle.  Since  Captain  Ward,  no 
one  individual  has  been  masterful  enough  to  bring  it  under 
his  personal  control,  and  there  have  been  many  wrangles 
among  its  owners.  More  than  a  few  have  been  made  to  walk 
the  plank;  but  it  is  a  strong  aggregation  of  five  large  fleets, 
manned  by  twenty  thousand  men,  and  with  a  pay-roll  of  six 
million  dollars  a  year. 

And  now  in  striking  contrast  to  the  rusty,  time-worn  war- 
ships of  the  Federal  Steel  navy,  come  the  American  Steel  and 

216 


MORGAN  AND  U.  S.  STEEL  CORPORATION 

Wire  vessels,  a  hundred  and  twenty-six  in  all.  Here  and  there 
among  them  is  a  veteran.  The  Schoenberger,  of  Pittsburgh, 
for  instance,  has  been  outliving  the  winds  and  the  waves  for 
seventy-seven  years.  But  most  of  the  ships  are  gay  with  fresh 
paint.  Flags  are  flying,  bands  are  playing,  and  all  is  spick 
and  span.  In  a  steam-yacht  ahead  rides  Admiral  John  Warne 
Gates — too  reckless  a  sailor,  some  say,  but  certainly  a  dashing 
and  dangerous  adversary.  Two  years  ago  he  gathered  his 
ships  together  from  all  parts  of  the  ocean,  hoisted  the  Gates 
banner,  and  set  out  for  gain  and  glory. 

Another  two-year-old  fleet  follows — the  American  Tin 
Plate.  Its  ships  are  noticeably  smaller,  but  more  numerous. 
It  is  an  aggregation  of  thirty-eight  squadrons,  with  two  hun- 
dred and  seventy-eight  vessels  in  all.  Its  admiral,  Daniel  G. 
Reid,  like  most  of  the  others,  began  as  a  cabin-boy  and  worked 
his  way  up.  Only  a  few  of  these  ships  are  more  than  eight 
years  old;  yet  they  have  already  met  and  defeated  the  Welsh 
tin-plate  navy,  which  had  been  regarded  as  invincible. 

Next  the  National  Tube,  a  thirty-vessel  fleet,  with  Admiral 
William  B.  Schiller  in  command,  steams  past.  Most  of  the 
ships  are  old,  but  they  have  recently  been  painted,  and  make 
a  good  showing.  It  was  upon  this  fleet  that  Carnegie  was 
about  to  make  such  a  fierce  onslaught  when  Morgan,  the  peace- 
maker, interfered. 

The  sixth  fleet  flies  the  well-known  Rockefeller  flag.  It 
was  picked  up,  here  a  vessel  and  there  a  vessel,  by  its  dreaded 
commander.  It  cost  him  little,  but  he  is  selling  it  for  some- 
thing like  fifty  million  dollars. 

In  the  rear  come  two  smaller  fleets — the  National  Steel  and 
the  Steel  Hoop.  Both  have  been  hastily  built,  and  are  newly 
painted  to  cover  their  defects.  Two  years  later  they  will  be 
disbanded  and  merged  with  the  big  Carnegie  navy. 

As  if  this  immense  aggregation  were  not  enough,  four  other 
large  squadrons  are  soon  to  be  added — the  American  Bridge, 

217 


THE   ROMANCE  OF   STEEL! 

in  which  was  Carnegie's  old  warship,  the  Keystone,  the  Clair- 
ton  Steel,  the  Union  Steel,  and  the  Shelby  Steel  Tube. 

It  is  now  Morgan's  herculean  task  to  federate  these  proud 
and  jealous  fleets,  so  that  there  shall  be  no  mutiny,  no  breaking 
away,  no  survival  of  old-time  prejudices.  He  will  be  the 
centre  of  a  clamouring  mob  of  owners  and  captains.  He  must 
know  the  record  and  present  condition  of  every  fleet.  He  must 
winnow  his  facts  from  a  mass  of  exaggerations  and  misstate- 
ments.  He  must  choose  officers  who  will  command  the  obedi- 
ence of  these  newly  reconciled  antagonists.  He  must  give 
the  vast  combination  a  new  name  and  a  new  flag,  for  which 
its  two  hundred  thousand  officers  and  men  will  be  willing  to 
fight  as  loyally  and  successfully  as  they  have  fought  on  their 
own  account.  Such  was  the  work  which  lay  before  Morgan 
in  the  first  year  of  the  new  century. 

STEEL  CORPORATION   STATISTICS 

And  now,  for  the  practical  people  who  love  facts  and  figures, 
here  is  a  feast  of  statistics.  In  the  long  history  of  commerce, 
where  has  there  been  a  corporation  with  possessions  like  these? 

The  United  States  Steel  Corporation  owns  as  much  land  as 
is  contained  in  the  three  States  of  Massachusetts,  Vermont, 
and  Rhode  Island. 

It  employs  one  hundred  and  eighty  thousand  workmen — 
more  than  the  combined  armies  of  Meade  and  Lee  at  Get- 
tysburg. 

More  than  a  million  of  the  American  people — as  many  as 
the  population  of  Nebraska  or  Connecticut — depend  upon  it 
for  a  livelihood. 

Last  year  it  paid  out  in  wages  one  hundred  and  twenty-eight 
million  dollars — more  than  the  United  States  pays  for  its  army 
or  for  its  navy.  "  Our  workmen  have  a  first  mortgage  on 
United  States  Steel,"  said  Charles  M.  Schwab, 

218 


MORGAN  AND  U.  S.  STEEL  CORPORATION 

It  owns  and  operates  a  railroad  trackage  that  would  reach 
from  New  York  to  Galveston,  or  from  Paris  to  Constantinople. 
It  possesses  thirty  thousand  cars  and  seven  hundred  locomo- 
tives. 

It  has  nineteen  ports  and  owns  a  fleet  of  one  hundred  large 
ore-ships.  This  is  the  most  numerous  of  all  American  fleets 
under  a  single  ownership.  It  is  the  sixth  largest  commercial 
fleet  in  the  world,  and  from  the  point  of  view  of  industrial 
efficiency,  it  is  perhaps  unequalled  in  any  country. 

It  has  ninety-three  blast  furnaces,  nearly  all  of  them  run- 
ning day  and  night,  and  it  makes  forty-four  per  cent,  of  the 
pig  iron  of  the  United  States. 

From  its  fifty  great  mines  it  produces  one-sixth  of  all  the, 
iron  ore  in  the  world.  In  one  year  it  heaps  up  a  mountain  of 
more  than  sixteen  million  tons  of  red  ore. 

It  makes  three-fifths  of  our  Bessemer  and  open-hearth  steel, 
two-thirds  of  the  steel  rails,  two-thirds  of  the  wire  rods,  three- 
fifths  of  the  steel  beams,  ten-elevenths  of  the  wire,  and  nearly 
all  of  the  wire  nails,  wire  fencing,  steel  tubing,  tin  plate,  and 
steel  bridges  produced  in  the  United  States. 

It  makes  more  steel  than  either  Great  Britain  or  Germany, 
and  one-quarter  of  the  total  amount  made  in  all  the  countries 
of  the  world. 

To  feed  its  ceaseless  fires,  it  burns  in  a  single  year  ten  mil- 
lion tons  of  coal,  eleven  million  tons  of  coke,  and  fifteen  bil- 
lion cubic  feet  of  natural  gas.  Its  supply  of  fuel  will  last  for 
sixty  years. 

It  can  make  anything  in  steel  from  a  carpet-tack  to  steel 
rails,  from  a  tin  can  to  armor-plate,  from  a  wire  nail  to  an 
Eiffel  Tower. 

Its  iron-works  and  steel-works  are  mainly  in  Pittsburgh  and 
twenty-five  smaller  "  steel  cities  "  within  a  hundred  miles'  dis- 
tance; but  it  also  owns  large  plants  in  Chicago,  Joliet,  Mil- 
waukee, St.  Louis,  Muncie,  Elmira,  Philadelphia,  Troy,  Hart- 

219 


THE   ROMANCE   OF   STEEL 

ford, 'Worcester,  and  elsewhere.  It  is  about  to  create  a  new 
industrial  centre  at  the  southern  end  of  Lake  Michigan.  Its 
ore  is  mainly  in  Minnesota.  Its  headquarters  are  in  New 
York,  though  as  a  New  Jersey  corporation  it  maintains  a 
nominal  "  general  office  "  in  Hoboken. 

If  it  had  been  organised  in  Pennsylvania,  its  fee  would 
have  been  fourteen  hundred  thousand  dollars,  and  its  yearly 
tax  more  than  five  millions;  but  being  organised  in  New  Jer- 
sey, its  charter  fee  was  a  mere  two  hundred  and  twenty  thou- 
sand dollars.  Even  this  comparative  trifle  was  more  than  the 
fortune  spent  by  Baron  Peter  Hasenclever  in  founding  New 
Jersey's  iron  business.  Its  annual  tax  to  the  State — another 
trifle  of  sixty  odd  thousand  dollars — is  more  than  three  times 
the  cost  of  the  famous  Lynn  iron-works,  built  in  1645. 

Its  total  responsibilities,  as  expressed  in  stocks  and  bonds, 
were  as  follows,  at  the  date  of  its  first  annual  report: 

Bonds  (mainly  five  per  cent,  bonds  held  by  the 

Carnegies)    $366,097,697 

Preferred  stock 510,281,100 

Common  stock 508,302,500 


Total    $1,384,681,297 

And  not  even  this  stupendous  total  expresses  the  full  power 
of  this  industrial  empire.  Behind  it  stood  Morgan,  Rocke- 
feller, and  Carnegie,  representing  about  two  billion  dollars  of 
well-handled  and  aggressive  capital. 

Such  an  immense  capitalisation  was  not  unknown  in  prin- 
ciple. The  plan  of  issuing  stock  based  on  expected  profits 
rather  than  actual  assets,  was  not  new  to  company-promoters. 
Several  hundred-million-dollar  companies  had  been  success- 
fully launched;  but  they  were  regarded,  by  old-fashioned 
financiers,  as  dangerous  experiments.  Consequently,  when 
Morgan  coolly  announced  that  his  new  company  would  pay 

220 


MORGAN  AND  U.  S.  STEEL  CORPORATION 

interest  or  dividends  upon  nearly  fourteen  hundred  millions, 
the  whole  international  world  of  finance  was  speechless  with 
surprise. 

FOURTEEN   HUNDRED  MILLIONS 

Fourteen  hundred  millions! 

Supposing  that  this  amount  represented  real  capital,  it 
would  be  equal  to  the  following: 

One-sixty-seventh  of  our  national  wealth  in  1900. 

One-fifth  of  our  national  wealth  in  1850. 

One-thirtieth  of  the  world's  manufactures. 

One-tenth  of  American  manufactures. 

One-fifteenth  of  all  the  gold  and  silver  mined  in  the  world 
since  the  discovery  of  America. 

More  than  the  combined  product  of  all  the  manufacturing 
industries,  farms,  fisheries,  and  mines  of  the  United  States 
in  1850. 

More  than  the  gross  receipts  of  all  American  railroads  in 
1899. 

One-fifth  of  the  resources  of  our  3,871  banks  in  1900. 

Seven-twelfths  of  the  deposits  in  our  savings  banks  in  1900. 

All  of  the  savings  banks  deposits  in  1890. 

The  value  of  all  the  animals  on  American  farms  in  1880. 

Combined  value  of  all  our  corn,  wheat,  rye,  oats,  barley, 
buckwheat,  and  potatoes  in  1900. 

Three  times  the  value  of  all  our  cotton  and  wool  in  1900. 

More  than  all  our  national  exports  in  1900. 

The  value  of  all  the  banks,  manufactories,  canals  and  street 
railways  in  Canada. 

'  The  value  of  all  Canadian  farms — both  land  and  imple- 
ments. 

One-eighth  of  the  national  wealth  of  Italy  or  Spain. 

The  profits  of  Monte  Carlo  for  two  hundred  years. 

221 


THE   ROMANCE   OF   STEEL 

The  expense  of  the  whole  consular  and  diplomatic  service 
of  the  United  States  for  seven  hundred  years. 

The  interest  on  our  public  debt  for  fifty  years. 

Twelve  times  the  capital  of  all  the  banks  in  the  city  of  New 
York. 

More  than  the  total  amount  of  stock  issued  by  the  eighty- 
six  largest  corporations  that  had  been  organised  from  1887 
to  1898. 

The  cost  of  ten  Panama  canals. 

The  cost  of  thirty-five  steel  plants,  each  as  large  as  Krupp's. 

All  the  pension  claims  of  the  United  States  for  the  next 
eleven  years. 

Every  life-insurance  policy  falling  due  for  seven  years. 

The  salary  of  seven  thousand  Presidents  during  twenty-eight 
thousand  years. 

All  the  exports  of  London  for  three  years. 

One-quarter  of  all  the  gold  coin  in  the  world  and  one-half 
of  all  the  silver. 

Twice  the  total  receipts  of  our  national  government. 

Two  and  a  half  times  the  amount  of  gold  and  silver  pro- 
duced in  1899. 

Two-thirds  of  all  the  money  in  circulation  in  America  in 
1900. 

All  the  money  in  circulation  in  1889. 

Three  times  the  gold  in  the  U.  S.  treasury  in  1900. 

The  cost  of  all  the  American  public  schools  for  six  years. 

A  little  fortune  of  $9,000  for  every  man  and  boy  in  its 
employ. 

Ninety  dollars  for  every  family  in  the  United  States. 

One  dollar  for  every  human  being  in  the  world. 

A  $3,000  home  for  every  family  iri  Iowa,  Kentucky  or 
Georgia. 

More  than  78,000  $2-a-day  workmen  could  earn  in  their 
lifetime.  « 

222 


MORGAN  AND  U.  S.  STEEL  CORPORATION 

A  pile  of  silver  dollars  2,200  miles  high. 

Two  hundred  and  sixty-four  car-loads  of  silver,  with  twenty 
tons  in  a  car. 

Enough  silver  dollars  to  pave  a  boulevard,  72  feet  wide, 
from  Ann  Arbor  to  Detroit. 

As  many  one-dollar  bills  as  would  make  a  green  sash  six 
times  around  the  world,  with  6,700  miles  left  for  a  double 
bow-knot  and  streamers. 

As  much  as  twenty  clerks  could  count  in  eight  years,  with 
each  counting  a  dollar  a  second  and  working  eight  hours  a 
day. 

Enough  gold  to  fill  a  train  of  forty-four  fifty-ton  cars. 

Enough  gold,  if  beaten  out,  to  cover  304,000  acres — over 
three-eighths  of  the  State  of  Rhode  Island. 

THE  GOLD  OF  ANCIENT  DAYS 

In  the  days  of  Froissart,  it  was  the  custom  for  a  few  of  the 
inhabitants  of  a  conquered  city  to  march  out  of  the  gates 
laden  with  treasure  for  their  conquerors.  But  what  would 
be  the  thoughts  of  the  good  old  chronicler  could  he  have  seen 
a  great  army  of  58,300  men,  each  staggering  under  the  weight 
of  a  hundred  pounds  of  pure  yellow  gold?  Marching  four 
abreast,  the  long  procession  would  be  eleven  miles  from  the 
first  rank  to  the  last. 

The  story  of  Montezuma's  gold,  captured  by  Cortes,  set 
Europe  in  a  blaze  of  cupidity.  Great  as  it  was,  it  was  but 
a  bagatelle  compared  with  Morgan's  paper  millions.  If  the 
United  States  Steel  millions  were  in  gold,  they  would  weigh 
230  times  as  much  as  the  plunder  of  a  Cortes. 

"  I  will  fill  this  room  with  gold — high,  yes,  high  as  my 
arms  can  reach,  if  you  will  give  me  my  freedom,"  said  Ata- 
hualpa,  the  Peruvian  Inca,  to  the  Spaniard  Pizarro.  "  Shouts 
of  incredulous  laughter  "  greeted  this  offer  of  the  captive  Inca, 

223 


THE  ROMANCE   OF   STEEL! 

wrote  the  historians.  But  the  Inca  made  good  his  promise, 
He  heaped  the  room  with  gold.  Before  the  eyes  of  the  amazed 
Spaniards  he  piled  70,550  pounds  of  it.  Hundreds  of  mules 
carried  the  yellow  treasure  to  the  Spanish  ships.  It  was 
thrown  under  the  decks  like  ballast — thirty-five  tons  of  the 
metal  that  was  more  precious  than  life.  Up  to  that  time, 
(1532)  there  was  no  record  of  any  wealth  which  could  com- 
pare with  this,  yet  it  was  less  than  two  per  cent,  of  the  Morgan 
millions. 

In  fact,  you  will  look  in  vain  through  the  histories  of  ancient 
days  for  any  wealth  that  can  be  compared  with  the  stupendous 
paper  value  placed  by  Morgan  upon  these  federated  steel 
companies.  The  writer  who  describes  the  wealth  of  the  United 
States  Steel  Corporation  is  confronted  by  this  startling  truth, 
— that  he  cannot  avail  himself  of  the  language  of  myth  or 
poetry.  The  riches  of  a  Croesus — the  gold  of  the  Spanish 
galleons — the  diamonds  of  Golconda — "  the  wealth  of  Ormus 
and  of  Ind! "  What  are  these  in  comparison  with  the  totals 
in  an  annual  report  of  this  company? 

One  simile,  and  one  only,  remains.  When  St.  John,  in  the 
wonderful  vision  with  which  the  New  Testament  concludes, 
sees  the  "  New  Jerusalem  "  of  the  far  future,  in  which  per- 
fected Humanity  shall  dwell,  he  pictures  it  as  a  "  city  of  pure 
gold."  But  this  was  Heaven,  not  earth.  Nothing  terrestial, 
whether  past  or  present,  fact  or  imagination,  equals  the  wealth 
of  this  single  American  corporation. 

^Public  approval  would  have  been  too  shallow  to  float  the 
United  States  Steel  Corporation,  had  it  been  launched  four 
years  earlier.  It  would  have  been  regarded  as  a  Utopian 
scheme,  no  less  unworkable  than  the  federating  of  the  Euro- 
pean monarchies  into  a  continent  of  republics.  But  in  1896 
and  1897  there  began  an  unprecedented  era  of  industrial 
speculation.  From  1896  to  1904  twelve  thousand  new  com- 
panies were  registered  in  New  Jersey  alone.  One  hundred 

224 


Copyright,  1905,  by  Pach  Srot.,  New  York. 
D.    O.    MILLS 


MORGAN  AND  U.  S.  STEEL  CORPORATION 

and  forty-nine  of  these,  formed  within  three  years,  had  a  total 
capitalisation  of  nearly  four  billions.  In  1901  it  was  estimated 
that  one-seventh  of  the  manufacturing  industries  of  the  United 
States  had  been  organised  as  stock  companies,  and  that  about 
four  billion  dollars  worth  of  their  stock  had  been  bought  by 
the  public.  On  January  7,  of  that  year,  two  million  shares 
were  sold  on  the  New  York  stock  exchange,  for  the  first  time 
in  the  history  of  the  institution.  The  price  of  a  seat  jumped 
from  thirty- five  thousand  dollars  in  the  summer  of  1900  to 
seventy-one  thousand  in  May  of  the  following  year.  Later  it 
rose  still  higher,  and  a  leading  cause  of  the  advance  was  the 
buying  and  selling  of  Steel  stock.  It  is  fair  to  say  that  the 
United  States  Steel  Corporation  added  at  least  twenty-five 
thousand  dollars  to  the  value  of  each  of  the  eleven  hundred 
seats  on  the  exchange. 

Since  1899,  when  a  train-load  of  New  York  financiers  went 
to  Pittsburgh,  on  the  invitation  of  Frick,  to  see  the  armour- 
plate  vaults  of  the  Union  Trust  Company,  the  wealth  of  the 
Smoky  City  had  been  better  appreciated  by  Eastern  investors. 
Financial  editors  pointed  out  that  the  value  of  our  iron  and 
steel  exports  alone  in  1900  was  almost  a  hundred  and  thirty 
million  dollars.  Some  prophesied  that  the  common  stock  of 
the  new  company  would  pay  twelve  per  cent.  "  This  United 
States  Steel  Corporation  can't  possibly  fail,"  said  the  Wall 
Street  men.  "It  means  unity,  co-operation,  assured  profit." 

WALL  STREET  AND  STEEL  STOCK 

Nevertheless,  when  the  stock  came  to  the  stern  test  of  the 
market,  the  price  it  brought  proved  that  somewhat  less  opti- 
mistic views  prevailed.  That  enterprising  body  of  outdoor 
speculators,  the  "  curb,"  turned  its  attention  to  the  great  new 
corporation  as  soon  as  its  formation  was  definitely  announced, 
quite  undeterred  by  so  trifling  an  obstacle  as  the  fact  that  its 

225 


THE   ROMANCE   OF   STEEL1 

securities  were  not  yet  in  existence.  The  first  sales,  on  Feb- 
ruary 26,  were  at  39  for  the  common  and  84' for  the  preferred. 
On  March  28,  when  the  stocks  were  listed  on  the  exchange 
itself,  the  ruling  prices  were  higher,  closing  at  44!  and  94. 
The  trading  was  on  an  enormous  scale,  the  number  of  shares 
that  changed  hands  being  as  follows : 

March  28     March  29 

Common    128,700         147,200 

Preferred 1 12,200         1 17,900 

But  this  was  only  a  beginning.  In  the  following  week  the 
sales  reached  much  larger  figures: 

April  I         April  2 

Common   275,600         212,300 

Preferred 146,000         107,200 

Prices,  too,  continued  to  rise,  closing  on  April  2  at  49  for 
the  common  and  96^  for  the  preferred.  Nor  was  this  the 
limit.  The  sight  of  a  great  "  bull "'  movement  thus  fairly 
under  way  drew  the  eager  public  into  the  market,  and  the 
swelling  tide  of  speculation  surged  higher  and  higher.  On 
April  29,  six  hundred  thousand  shares' of  Steel  stock  were 
bought  and  sold;  and  even  this  enormous  trading  was  outdone 
on  the  30th,  when  all  stock-exchange  records  were  broken, 
the  total  sales  for  the  five  hours  of  business  being  more  than 
three  million  shares,  almost  a  quarter  of  them  being  United 
States  Steel  securities.  At  the  close  of  that  delirious  day  "  Steel 
common"  stood  at  53!,  "  Steel  preferred"  at  101. 

But  the  speculative  high-water  mark  had  been  reached. 
Nine  days  later  there  came  a  slump  that  was  still  more  striking 
and  sensational  than  the  boom.  The  warfare  of  two  rival 
groups  of  capitalists  culminated  in  the  most  remarkable 

226 


CHARLES    STEELE 


MORGAN  AND  U.  S.  STEEL  CORPORATION 

"  corner  "  in  the  history  of  Wall  Street.  The  bone  of  con- 
tention was  the  control  of  Northern  Pacific.  The  stock  of 
that  railroad  had  never  sold  at  par  until  three  weeks  before; 
but  on  May  9  the  bidding  for  it  was  so  frantic  that  it  leaped 
up  to  fabulous  figures,  one  lot  selling  at  a  thousand  dollars 
a  share.  The  result  was  panic — sudden,  swift,  and  disastrous. 
It  was  whispered  that  no  mercy  would  be  shown  to  the  vic- 
tims of  the  "  corner."  Those  who  were  "  short"  of  Northern 
Pacific  saw  bankruptcy  yawning  before  them.  Brokers  began 
to  throw  over  their  other  holdings  to  save  themselves  from 
ruin.  As  the  alarm  spread,  and  as  prices  went  tumbling,  no 
man  knew  where  he  stood.  United  States  Steel  dropped  to  24 
and  69,  almost  cutting  the  value  of  the  shares  in  half,  and 
" wiping  out"  a  countless  host  of  speculators. 

A  STEP  TOWARD  PUBLIC  OWNERSHIP 

When  the  panic  had  run  its  brief  course,  Steel  stock  rose 
easily  to  42  and  89!  at  the  close  of  the  day's  business,  and  on 
May  10  it  recovered  still  further,  to  45  and  93!.  Although 
it  was  only  six  weeks  old,  the  young  giant  had  weathered  the 
storm.  Indeed,  it  stood  on  much  too  solid  a  basis  to  be  over- 
thrown by  a  Wall  Street  incident.  Two-thirds  of  the  Ameri- 
can iron  and  steel  trade  had  been  welded  together.  A 
destructive  industrial  war  had  been  prevented.  A  bloodless 
revolution  had  taken  place.  The  most  profitable  business  in 
the  United  States  had  been  withdrawn  from  the  few  and  given 
to  the  many.  The  Steel  stock  was  now  held  by  some  forty  thou- 
sand people — a  number  which  afterward  increased  to  eighty 
thousand.  A  little  more,  and  Morgan  would  have  pushed  the 
steel  business  forward  into  public  ownership. 

"  It  was  the  longest  step  ever  taken  in  the  direction  of  so- 
cialism," said  the  president  of  one  of  the  constituent  com- 
panies to  the  writer. 

227 


THE   ROMANCE   OF   STEEL1 

"  I'll  give  you  a  name  for  your  '  Romance  of  Steel,' "  said 
George  W.  Perkins,  on  the  first  occasion  when  I  asked  him 
for  information.  "  You  ought  to  call  it  '  How  the  People  of 
the  United  States  Bought  the  Steel  Business.'  What  is  the 
essential  difference,"  continued  Mr.  Perkins,  "  between  the 
United  States  Steel  Corporation,  as  it  was  organised  by  Mr. 
Morgan,  and  a  Department  of  Steel,  as  it  might  have  been  or- 
ganised by  the  government?  Suppose  Lyman  J.  Gage,  instead 
of  Mr.  Morgan,  had  consolidated  the  steel  business.  Wouldn't 
he  have  had  to  buy  out  the  owners?  To  do  this  wouldn't 
he  have  had  to  issue  bonds?  And  wouldn't  a  limited  number 
of  investors  have  bought  the  bonds?  Is  it  not  also  true  that  the 
United  States  Steel  Corporation  has  abolished  the  secrecy 
which  covers  the  ordinary  private  company?  Does  it  not  issue 
public  reports  of  its  progress,  of  its  gains  or  its  losses,  just  as 
if  it  were  a  department  of  the  government?  Mr.  Morgan 
unified  the  American  steel  business,  but  he  distributed  the 
power  of  ownership.  He  stepped  in  and  averted  the  threat- 
ened danger  of  one-man  power.  He  transferred  the  authority 
from  a  few  hundreds  to  tens  of  thousands." 

Others  at  the  time  declared  that  the  great  corporation  was 
in  itself  a  government. 

"  What  is  it  but  a  federal  government?  "  said  Sir  Gilbert 
Parker.  "  It  has  its  laws,  its  consuls  in  foreign  countries,  its 
departments,  and  so  forth." 

On  the  whole,  the  new  company  was  received  with  approval 
by  the  American  public.  It  could  point,  in  self-justification, 
to  the  telling  fact  that  the  steel  prices  of  1901  were  lower 
than  those  of  1900.  From  its  standpoint,  the  advantages  of  the 
new  plan  were  summed  up  as  follows  by  President  Schwab: 

(1)  One  New  York  office  instead  of  ten  or  more. 

(2)  Better  handling  of  ore-ships. 

(3)  A  better  arrangement  of  work,  so  that  each  plant  could 
make  what  best  suited  it. 

228 


MORGAN  AND  U.  S.  STEEL  CORPORATION 

(4)  Friendly  rivalry  between  different  plants,  through  the 
constant  comparison  of  their  work. 

(5)  Fewer,  better-paid,  and  better-skilled  specialists. 

(6)  The  establishing  of  a  clearing  house  for  trade  informa- 
tion. 

(7)  Saving  of  freight  charges,  as  Pittsburgh  could  now 
make  steel  for  the  East,  Chicago  for  the  West,  Lorain  for  the 
lake  cities,  and  Youngstown  for  the  Middle  States. 

In  every  department  the  best  men  were  kept  and  the  super- 
fluous ones  were  let  go.  The  American  Steel  and  Wire  Com- 
pany, for  instance,  kept  only  eighteen  out  of  three  hundred 
travelling  salesmen.  The  foreign  business  was  handled  from 
one  London  office,  under  Carnegie's  man,  Millard  Hunsiker. 
Everything  on  a  large  scale,  by  high-speed  specialists  and  the 
best  machinery — this  was  the  plan  originated  by  Carnegie 
and  carried  further  by  Morgan.  This  was  how  the  million- 
aires were  made. 

THE    QUESTION    OF    OVER-CAPITALISATION 

Before  the  United  States  Steel  Corporation  was  organised, 
it  had  been  announced  that  "  there  will  be  no  issuing  of  new 
securities — only  a  consolidation  of  existing  securities  for  the 
sake  of  harmonious  action."  But  when  Morgan  came  to 
make  his  bargains  with  the  steel  men,  their  demands  soared 
so  high  that  he  was  compelled  to  pile  million  upon  million. 
He  paid  exorbitant  prices  for  the  plants.  Everybody  knew 
it.  Morgan  himself  knew  it.  But  he  knew  that  the  stock 
would  shake  down  to  its  level,  and  that  the  job  had  to  be  done, 
whether  it  cost  much  or  little.  The  corporation's  officials 
admit  that  the  capitalisation  was  excessive;  but  they  maintain 
that  the  plant  is  steadily  increasing  in  value,  and  that  it  is 
able  to  pay  dividends  upon  the  entire  amount. 

All  Pittsburgh  believed  that  Morgan  paid  too  much  to 

229 


THE   ROMANCE   OF   STEEU 

Carnegie.  Wall  Street,  which  considers  profits  rather  than 
plants,  had  a  different  opinion.  It  approved  of  paying  a  sum 
equal  to  twenty-five  millions  a  year  for  a  concern  which  was 
making  forty.  As  for  the  other  constituent  companies,  they 
were  over-capitalised  from  every  point  of  view.  Half  of 
their  stock  was  water,  and  Morgan  was  obliged  to  add  sev- 
enty-four millions  to  their  inflation. 

When  one  of  the  smaller  steel  corporations  was  being 
formed,  it  is  said  that  a  party  of  convivial  steel  men  were  on 
their  way  to  Chicago  one  night,  after  a  buying  tour. 

"  There's  a  small  steel-mill  at  the  next  station,"  said  one. 
"  Let's  get  out  and  buy  it." 

The  wine  had  been  passing  freely,  and  it  was  midnight;  but 
they  agreed.  In  an  hour  or  so  they  were  pounding  on  the  door 
of  the  owner  of  the  steel-works. 

"  Come  out  and  sell  us  your  plant,"  they  shouted. 

"My  property  is  worth  two  hundred  thousand,"  he  said; 
"but  it  is  not  for  sale." 

"Never  mind  about  the  price,"  said  the  hilarious  promoters. 
"  We'll  give  you  three  hundred  thousand — five  hundred 
thousand! " 

The  owner  surrendered.  It  was  the  first  time  that  half  a 
million  had  come  hammering  on  his  door  at  midnight.  He 
sold  his  plant.  The  buyers  transferred  it  to  their  corporation 
at  twice  what  it  had  cost  them,  taking  their  pay  in  watered 
stock;  and — so  the  picturesque  narrative  concludes — the  cor- 
poration raised  its  price  and  sold  it  to  Morgan.  This  story 
may  be  exaggerated,  but  it  illustrates  the  way  in  which  cor- 
porations become  top-heavy  with  fiat  capital. 

No  one  knew  what  the  United  States  Steel  Corporation  was 
actually  worth.  There  were  so  many  factors  to  consider  that 
it  would  have  been  a  colossal  task  for  a  board  of  experts  to 
fix  an  amount.  From  six  different  standpoints,  its  value  might 
be  roughly  stated  as  follows: 

230 


Copyright,  19J6,  by  Alman  dk  Co,  New  York. 

GEORGE    W.    PERKINS 


MORGAN  AND  U.  S.  STEEL  CORPORATION 

(i)   Net  earnings  in  1901,  capitalised 

at  six  per  cent $1,800,000,000.00 

i(2)   Net  earnings  in  1901,  capitalised 

at  ten  per  cent 1,080,000,000.00 

(3)  Book  estimates 1,229,000,000.00 

(4)  Expert  opinion  in  1901   673,000,000.00 

(5)  Wall  Street  value  in  1901,  tak- 
ing common  stock  at  50  and  per- 

ferred  at  par 764,000,000.00 

'(6)   Estimate  by  the  Industrial  Com- 
mission           559,000,000.00 

The  average  of  these  six  estimates  would  work  out  at 
$1,017,000,000. 

If  the  entire  plant  of  the  corporation  could  have  been 
replaced,  which  is  now  impossible  so  far  as  ore,  coke,  and 
mill-sites  are  concerned,  the  cost  of  duplicating  it  would  have 
been  about  one-half  of  its  capitalisation.  But  taking  it  as  a 
going  concern,  with  all  its  advantages  of  ore,  coke,  location, 
and  management,  there  seemed  fairly  good  reason  to  believe 
that  its  securities  were  worth  their  full  nominal  price. 

The  corporation  began  its  career  handicapped  by  a  lack 
of  ready  money  in  the  treasury,  by  the  heavy  cost  of  organisa- 
tion, and  by  a  burden  of  fifty-four  millions  of  fixed  charges. 
At  several  points  it  was  not  wisely  officered.  There  were  two 
or  three  smouldering  feuds  among  the  steel  men  which  had  to 
be  repressed.  The  corporation  needed,  therefore,  four  or  five 
years  of  experience  to  remedy  its  defects  and  to  grow  together. 
When  Morgan  was  constructing  it,  he  had  his  eye  focussed 
upon  the  middle  of  the  twentieth  century  rather  than  upon  its 
beginning. 

THE    STEEL    KINGS    FROM    CHICAGO 

We  have  already  seen  what  effect  this  Morganisation  of  the 
steel  business  had  upon  the  fortunes  of  Carnegie  and  his  brood 
of  forty  young  millionaires.  They  represented  Pittsburgh's 

231 


THE   ROMANCE   OF   STEEL 

share  of  gain  and  glory.  The  Chicago  money-getters  belonged 
mainly  to  the  Moore  and  Gates  groups,  two  distinguished 
exceptions  being  Norman  B.  Ream,  a  veteran  speculator, 
and  the  late  Marshall  Field,  who  stood  ready  to  invest  a  few 
of  his  many  millions  in  any  promising  enterprise.  Both  of 
these  Western  groups  were  of  the  speculative  and  financiering 
species.  Not  one  of  their  members  was  a  practical  steel- 
maker. In  this  respect  they  contrasted  vividly  with  the  Car- 
negians,  who  knew  every  foot  of  a  steel-mill,  but  who  were 
the  most  innocent  and  lamb-like  novices  in  Wall  Street  affairs. 
The  most  conspicuous  Chicagoan  was  John  Warne  Gates. 
It  was  he,  in  fact,  who  first  suggested  a  billion-dollar  steel 
corporation,  two  years  before  Morgan  became  the  steel  king 
of  the  world.  No  career  had  been  more  strenuous  than  his. 
Life  was  to  him  a  give-and-take  battle  for  high  stakes.  He 
was  a  financier  who  carried  into  business  all  the  sporting  in- 
stincts of  the  betting-ring.  He  was  a  new  type  among  the  steel 
men,  not  at  all  like  Carnegie,  who  had  never  bought  a  share 
of  stock  through  Wall  Street.  And  he  was  still  less  like  the 
old  "  fathers"  of  Pittsburgh,  who  believed  that  every  steel- 
maker should  live  under  the  smoke  of  his  own  mill. 


JOHN    W.    GATES,    THE   WIRE    KING 

As  a  boy,  Gates  grew  up  on  an  Illinois  farm.  He  was  ener- 
getic and  precocious.  Two  years  before  he  became  a  voter 
he  had  fallen  in  love  with  an  Illinois  girl,  and  married  her. 
At  that  time  he  was  "Johnny"  Gates,  the  manager  of  a  little 
hardware  store  in  a  farming  village. 

Now  there  was  in  De  Kalb,  Illinois,  a  man  named  Isaac 
Ellwood,  who  was  trying  to  sell  a  new  commodity  called 
barbed  wire.  At  his  wife's  suggestion,  Ellwood  had  bought 
the  right  to  make  this  wire  from  a  Missouri  blacksmith.  His 
trouble,  he  found,  was  not  in  making  barbed  wire,  but  in 

232 


MORGAN  AND  U.  S.  STEEL  CORPORATION 

selling  it.  It  was  a  novelty,  and  cattlemen  considered  it  too 
flimsy  to  be  of  any  use.  At  this  juncture  Ellwood  met  Gates, 
was  struck  with  the  young  man's  geniality  and  readiness  of 
speech,  and  sent  him  out  to  sell  barbed  wire  in  Texas  on  a 
salary  of  twenty-five  dollars  a  week. 

This  Texas  trip  made  Gates.  It  also  made  barbed  wire. 
The  Texas  cattlemen  had  never  seen  barbed  wire  before,  and 
they  ridiculed  it. 

"That  stuff  wouldn't  hold  a  Texas  steer  a  holy  minute," 
said  they. 

Gates  was  put  on  his  mettle.  "  I'll  show  you  whether  it 
will  or  not,"  said  he. 

This  was  in  the  picturesque  town  of  San  Antonio,  which  is 
dotted  liberally  with  small  open  spaces,  or  plazas.  Gates 
hired  the  nearest  plaza,  and  got  together  a  drove  of  twenty- 
five  of  the  wildest  Texas  steers  that  could  be  found.  Then 
he  fenced  his  plaza  with  barbed  wire,  put  the  steers  inside, 
and  gave  the  cattlemen  a  free  show.  The  steers  charged  the 
wire,  and  were  pricked  by  the  barbs.  They  shook  their  heads 
and  charged  again,  with  the  same  result.  After  two  or  three 
of  these  defeats  they  huddled  together  on  the  inside  and  tried 
to  think  it  over.  Gates  sold  hundreds  of  miles  of  his  wire 
that  day  at  eighteen  cents  a  pound. 

In  a  few  years  he  had  a  barbed  wire  factory  of  his  own.  One 
day  his  factory  burned  down.  Fifteen  minutes  after  his  fore- 
man had  reported  that  it  was  totally  wrecked,  he  had  entered 
into  partnership  with  William  Edenborn,  and  was  filling 
orders  as  usual.  Six  years  later  he  made  his  first  large  sum 
of  money,  a  hundred  thousand  dollars,  by  a  big  sale  of  English 
steel.  Every  dollar  that  he  could  lay  his  hands  on  went  into 
wire.  No  one  at  that  time  saw  as  clearly  as  he  that  wire  was 
henceforth  to  be  the  nerve  of  civilisation,  as  steam  and  elec- 
tricity were  to  be  its  muscle  and  steel  its  bone. 

In  1892  he  merged  several  large  wire  companies  and  be- 

233 


THE   ROMANCE   OF   STEEL 

came  the  wire  king  of  America;  and  since  then  millions  have 
been  his  units.  Three  years  afterward  he  was  the  president 
of  the  Illinois  Steel  Company,  which  in  1898  was  enlarged 
into  the  two-hundred-million-dollar  Federal  Steel  Company. 
No  one  except  Carnegie  stood  above  him  in  the  steel  trade. 
During  the  previous  year  he  was  said  to  have  cleared  twelve 
million  dollars  in  Wall  Street,  in  connection  with  his  Ameri- 
can Steel  and  Wire  Company;  and  from  that  time  the  lure 
of  the  ticker  has  drawn  him  into  many  speculations. 

Gates  is  an  extreme  type  of  the  American  "  hustler."  Like 
most  steel  men,  he  is  short  in  stature,  and  as  energetic  as  a 
cyclone.  He  is  a  stanch  friend  and  a  first-class  enemy.  He 
believes  in  American  business  as  a  Saint  Gaudens  believes  in 
art — as  an  Edison  believes  in  electricity.  He  is  an  organiser, 
a  promoter,  a  boomer — a  "bull,"  as  Wall  Street  would  say. 

Gates  is  a  good  maker  and  a  good  spender  of  money.  It 
is  a  fact,  not  generally  known,  that  he  has  an  unusually  fine 
picture  gallery  in  his  New  York  apartments.  This  gallery 
contains  two  specially  notable  groups.  One  is  a  fine  collection 
of  those  quiet  landscapes  in  which  Corot,  Rousseau,  Daubigny, 
and  their  colleagues  embodied  the  soul  of  the  Barbizon  woods 
and  fields;  the  other  is  a  group  of  the  stately  English  ladies 
of  a  century  ago  who  were  immortalised  by  Reynolds,  Rom- 
ney,  Gainsborough,  Hoppner,  and  Lawrence.  Beyond  these, 
his  taste  seems  to  range  widely,  from  Rembrandt  and  Rubens 
to  such  moderns  as  the  German  Griitzner,  the  Italian  Asti, 
and  the  American  Van  Boskerck. 

Unlike  several  other  steel  barons,  who  rose  to  power  on 
the  backs  of  their  friends,  Gates,  as  he  battled  and  buffeted  his 
way  to  the  front,  always  made  a  path  wide  enough  for  his 
chums  as  well  as  for  himself.  The  Gates  coterie  includes 
John  A.  Drake,  William  Edenborn,  John  Lambert,  Alfred 
Clifford,  and  Isaac  L.  Ellwood.  No  association  of  capitalists 
plays  the  game  of  finance  with  more  dash  and  enthusiasm. 

234 


MORGAN  AND  U.  S.  STEEL  CORPORATION 

They  are  free  lances,  ready  for  a  tilt  with  the  biggest  man  in 
the  field.  Their  capital  is  scattered  in  all  manner  of  enter- 
prises. It  was  the  Gates  group,  for  instance,  that  gave  New 
York  its  Luna  Park  and  its  Hippodrome. 


THE  NAPOLEONS   OF  TIN    PLATE 

There  were  four  in  the  Moore  or  Rock  Island  group — all 
dashing  knights  of  the  dollar — whose  adventures  would  read 
like  the  voyages  of  Sindbad  the  Sailor.  They  were  D.  G. 
Reid,  W.  B.  Leeds,  and  the  Moore  brothers.  The  latter  have 
been  mentioned  before.  As  for  Reid  and  Leeds,  they  have 
been  Damon  and  Pythias  since  childhood.  Both  were  born 
about  forty-eight  years  ago  in  Richmond,  Indiana,  which  was 
then  a  farming  town  of  five  or  six  thousand  inhabitants.  Dan 
Reid  lived  on  a  farm,  Billy  Leeds  in  the  town.  Dan  began 
his  business  career  by  sweeping  out  a  bank,  working  up,  after 
a  while,  to  be  its  president.  Billy  began  as  a  rodman  on  the 
Pennsylvania  Railroad,  and  climbed  to  the  position  of  branch 
superintendent.  As  soon  as  the  thirty-dollar-a-ton  duty  was 
placed  on  tin  plate,  in  1891,  the  two  young  men  swooped  down 
upon  the  feeble  little  tin-making  plants  that  had  been  fighting 
bankruptcy  for  twenty  years,  and  swept  them  all  together  into 
a  Tin  Plate  Trust  before  they  had  time  to  find  out  what  was 
happening. 

Tin  plate  is  one  of  the  youngest  branches  of  the  steel  trade. 
There  was  a  small  plant  at  Leechburg  as  far  back  as  1872; 
but  it  was  impossible  to  compete  with  Wales  and  make  a  fair 
profit.  No  tariff  was  levied  on  tin,  because  its  importers  were 
influential  in  politics,  and  because  it  was  generally  supposed 
that  the  making  of  it  was  a  Welsh  secret.  Reid  and  Leeds 
resolved  to  make  the  experiment  on  a  large  scale.  The  day 
after  the  McKinley  tariff  bill  was  signed,  they  ordered  tin- 
making  machinery — a  quarter  of  a  million  dollars'  worth— 

235 


THE   ROMANCE   OF   STEEL 

from  Wales.  A  body  of  Welshmen  came  with  the  machin- 
ery; but  they  failed  to  make  the  new  plant  a  success.  Reid 
and  Leeds  were  not  millionaires,  and  it  was  a  cruel  setback. 

Then  came  the  Presidential  campaign  of  1892.  Tin  plate 
was  a  national  issue.  Workmen  paraded  in  Pittsburgh,  wear- 
ing tin  caps.  Democrats  claimed  that  campaign  money  was 
being  used  to  start  tin-plate  works.  The  whole  industry  was 
thrown  into  the  political  caldron.  But  the  two  young  Indi- 
anians  never  weakened.  They  adapted  their  machinery  to 
American  raw  material;  they  set  inventors  to  work;  and  in 
the  end  they  remade  the  industry  on  American  lines. 

Within  six  years  they  had  combined  two  hundred  and 
seventy-eight  mills  into  a  fifty-million-dollar  corporation. 
The  machinery  was  improved  to  such  an  extent  that  to-day 
the  Welsh  tin-maker  can  go  to  school  in  Monessen,  Newcastle, 
and  Vandergrift.  Reid  and  Leeds,  like  Morgan,  paid  enor- 
mous prices  for  independent  plants;  but  they  took  long  views 
of  the  tin-plate  business,  and  came  out  worth  probably  forty 
millions  apiece.  They  and  the  Moores  received  from  Mor- 
gan one  hundred  and  forty  million  dollars  in  Steel  stock  when 
the  big  corporation  was  formed.  They  at  once  bought  con- 
trol of  the  Rock  Island  Railroad,  and  have  since  been  known 
as  the  Rock  Island  group. 

THE    NEW    TRIUMVIRATE    OF    STEEL 

As  to  the  three  men  whom  Morgan  placed  in  control  of 
the  United  States  Steel  Corporation — Judge  E.  H.  Gary, 
George  W.  Perkins,  and  Charles  M.  Schwab — all  were  rep- 
resentative of  larger  interests.  Gary  had  been  born  and 
bred  in  an  Illinois  farming  town,  which  contained  half  as 
many  people  as  the  skyscraper  where  he  now  has  his  office. 
He  was  first  clerk  of  the  little  local  court,  then  mayor,  then 
a  lawyer  whose  business  grew  until  it  came  to  the  notice  of 

236 


MORGAN  AND  U.  S.  STEEL  CORPORATION 

the  Chicago  steel  kings.  In  a  short  time  he  was  in  demand 
through  his  skill  in  managing  big  deals.  In  appearance  and 
manner  Gary  resembles  a  Methodist  bishop — benign,  suave, 
cordial,  and  earnest.  He  is  a  man  of  sense,  not  genius — of 
diplomacy,  not  bluntness. 

While  Gary  represented  the  Morgan  interests  from  the 
Chicago  side,  George  W.  Perkins  represented  the  Morgan 
interests  from  the  New  York  side.  Perkins,  too,  was  a  man 
who  owed  little  to  any  one  but  himself.  He  began  with  a 
broom  in  a  Chicago  office;  then  he  budded  into  business  life  as 
an  insurance  agent.  From  an  agent  he  became  an  organiser  of 
agents.  His  remarkable  success  in  this  work  carried  him  to 
one  of  the  highest  rungs  of  the  insurance  ladder,  from  which 
he  stepped  across  into  a  partnership  with  Morgan. 

In  many  respects  there  is  a  marked  contrast  between  Per- 
kins and  his  formidable  partner.  His  forte  is  in  dealing  with 
men,  rather  than  money.  He  is  almost  too  companionable, 
to  fluent,  too  many-sided,  for  a  financier.  His  adaptability 
and  his  rapid-fire  brain  give  him  the  equipment  of  a  journal- 
ist or  a  statesman.  When  he  took  his  place  at  the  head  of 
the  Finance  Committee  of  the  steel  combine,  it  was  his  first 
appearance  as  a  steel  magnate.  To  his  vision  there  loomed 
up  an  immense  opportunity  for  making  a  gigantic  organisa- 
tion of  men  who  would  work  together  for  a  common  interest 
in  the  greatest  of  all  industrial  enterprises.  Neither  he  nor 
Gary  knew  steel  as  a  metal.  To  them  it  was  a  stock — a  purely 
financial  entity. 

Such  were  the  prize-winners  in  the  strenuous  competition 
of  steel  kings.  They  deserve  most  of  the  credit  for  consoli- 
dating the  American  iron  industry,  but  not  all.  No  one 
individual,  no  one  event,  no  one  tendency,  created  the  im- 
mense industrial  empire  which  we  know  by  the  name  of  the 
United  States  Steel  Corporation.  It  stands  as  the  finished 
product  of  a  hundred  years  of  invention,  enterprise,  and  prog- 

237 


THE   ROMANCE   OF   STEEL 

ress.  In  its  strength  and  in  its  weakness,  in  what  is  stable  and 
what  is  speculative,  it  is  typical  of  the  civilisation  from  which 
it  sprang. 

It  was  even  more  than  a  national  production;  it  was  an 
assembling  of  men  and  ideas  from  all  the  civilised  countries 
of  the  world.  There  went  to  its  making  the  mechanical  skill 
of  the  English,  the  dexterity  of  the  Welsh,  the  tenacity  of  the 
Scots,  and  the  learning  of  the  Germans,  welded  together  by 
the  enterprise  and  organising  genius  of  Americans. 

As  the  main  roots  of  a  towering  tree  are  nourished  by 
thousands  of  tiny  feeders — as  the  largest  tributaries  of  a  broad 
river  are  sustained  by  innumerable  trickling  streams,  so  there 
stand  behind  this  vast  industrial  structure  the  tiny  efforts  of 
countless  men  and  women.  That  which  we  see  and  know  is 
only  the  final  result;  it  is  only  the  crest  of  a  huge  coral  reef 
whose  base  lies  deep  beneath  oblivion's  sea.  And  so,  while 
the  profit  and  glory  of  this  long  evolutionary  process  may  go 
to  a  few  individuals,  endowing  them  with  the  power  and 
prestige  of  kings,  those  who  have  followed  this  story  of  steel 
from  its  romantic  beginning  to  the  present  will  understand 
that  our  steel  business  is,  as  truly  as  our  literature  or  our 
ethics,  the  product  of  the  human  race. 


'238 


CHAPTER  VIII 
SIX  YEARS  OF  THE  STEEL  TRUST 

An  Impartial  Summary  of  the  United  States  Steel  Corporation's  Record,  of 
Its  Present  Situation,  and  of  Its  Prospects — What  the  Greatest  of  Indus- 
trial Organisations  Has  Done  for  the  Iron  and  Steel  Trade,  and  What 
Is  Said  of  It  by  Its  Friends  and  by  Its  Critics. 

THE  first  annual  report  of  the  United  States  Steel  Cor- 
poration was  the  most  remarkable  financial  docu- 
ment that  had  ever  been  known  in  the  long  history 
of  commerce. 

It  looked  more  like  a  magazine  that  an  annual  report,  with 
its  sixty-four  pages  and  sixty-three  illustrations  of  furnaces 
and  steel-mills.  And  it  was  sent  to  nearly  sixty  thousand 
stockholders — a  larger  circulation  than  many  a  magazine 
possesses.  Its  figures  were  those  of  an  empire,  rather  than 
of  a  private  company  of  American  business  men.  Its  revenue 
of  five  hundred  and  sixty  millions  was  equal  to  that  of  the 
ten  kingdoms  of  Spain,  Portugal,  Holland,  Roumania,  Swe- 
den, Norway,  Greece,  Denmark,  Siam,  and  Turkey.  The  re- 
ceipts of  the  United  States  itself,  for  1902,  exclusive  of  the 
postal  business,  amounted  to  only  two  millions  more  than  those 
of  the  United  States  Steel  Corporation. 

This  wonderful  corporation  was  not  a  bank,  yet  it  had  more 
than  fifty  millions  in  its  vaults — a  greater  sum  than  the  de- 
posits in  any  of  the  New  York  savings  banks  except  five,  or 
any  of  the  national  or  State  banks  except  seven. 

It  was  not  a  railroad,  yet  it  operated  five  large  railway  sys- 
tems, with  nearly  five  hundred  locomotives  and  more  than 

239 


THE   ROMANCE   OF   STEEL 

twenty-six  thousand  cars.  And  these  were  not  freight  roads 
merely,  as  eighty-three  of  the  cars  were  for  passengers. 

It  was  not  a  marine  corporation,  yet  it  possessed  a  fleet  of 
more  than  a  hundred  vessels,  many  of  them  the  best  of  their 
kind,  whose  earnings  for  the  year  furnished  a  nine-million- 
dollar  item  to  the  report. 

Without  counting  its  sixteen  docks,  its  seventeen  thou- 
sand coke-ovens,  its  two  hundred  square  miles,  of  gas  land, 
its  hundred  thousand  acres  of  coal  land,  and  its  sixty 
ore  mines  in  the  Lake  Superior  region,  this  corporation  re- 
ported itself  as  being  the  owner  of  nearly  sixteen  hundred 
manufacturing  plants. 

The  grand  total  of  assets — no  human  mind  can  transform 
this  line  of  figures  into  an  idea — was  $1,546,544,234.65. 

Roughly  speaking,  labour  got  one  hundred  and  twenty  mil- 
lion dollars  for  the  year's  work;  the  stockholders,  fifty-six 
millions;  the  machinery  for  improvements  and  depreciation, 
forty-five  millions;  and  Andrew  Carnegie,  the  grand  old  pen- 
sioner, got  eighteen  millions,  including  the  three  millions  set 
apart  as  a  sinking  fund  for  the  payment  of  his  bonds  in  the 
year  1952. 

The  168,127  workmen  received  an  average  of  seven  hundred 
and  seventeen  dollars  apiece;  the  stockholders  averaged  about 
a  thousand  dollars.  So  far  as  the  profits  were  concerned,  the 
little  Scot,  in  spite  of  his  abdication,  still  towered  above  all 
the  newcomers. 

The  net  profits  of  the  corporation  for  the  year  were  more 
than  a  hundred  and  thirty-three  million  dollars.  Out  of  this 
twenty-five  millions  were  taken  for  special  improvements 
which  were  thought  to  be  advisable  though  not  strictly  neces- 
sary. Because  of  the  use  of  this  generic  word  "  improvements," 
it  is  impossible  to  tell  the  exact  percentage  of  profits.  Just  how 
much  of  the  forty-five  millions  that  come  under  this  head 
was  spent  for  the  actual  enrichment  of  the  property,  and  how 
much  of  it  went  for  political  purposes,  or  to  cover  up  mistakes 

1240 


ELBERT    H.    GARY 


OFTHE 

UNIVERSITY 

OF 


SIX   YEARS   OF  THE    STEEL   TRUST 

and  losses,  no  one  outside  of  the  corporation  can  tell.  There 
is  no  cause  for  suspicion  in  the  report  itself;  but  recent  reve- 
lations concerning  the  methods  of  "  high  finance  "  have  made 
the  American  public  more  sophisticated  than  it  was. 

THE   SUDDEN   "  SLUMP "   OF    1903 

The  corporation  began  well,  as  a  money-maker.  For 
twenty-seven  months  it  moved  along  as  steadily  as  a  clock, 
ticking  out  fourteen  millions  in  dividends  every  quarter  of  a 
year.  Then,  in  the  middle  of  1903,  came  trouble.  It  was  a 
feast-and-famine  year.  The  market  had  become  surfeited 
with  the  stock  of  over-capitalised  corporations.  In  two  years 
the  total  capitalisation  of  new  companies  had  soared  up  to 
nearly  eight  billion  dollars.  There  was  an  over-production 
of  stock,  and,  when  prices  fell,  the  good  suffered  with  the 
bad.  The  wreck  of  Schwab's  ship-building  enterprise,  and 
the  governmental  veto  put  upon  the  Northern  Securities  mer- 
ger, made  matters  worse.  "Steel  preferred"  went  below 
fifty,  and  the  common  stock  plunged  to  ten. 

On  New  Year's  Day,  1904,  the  stockholders  regarded  the 
wish  for  a  happy  new  year  as  a  cynicism.  They  had  received 
a  message  notifying  them  that  the  profits  for  the  preceding 
three  months  had  dropped  to  the  beggarly  sum  of  two  millions 
dollars.  Only  by  drawing  upon  the  company's  surplus  could 
the  quarterly  dividend  be  paid  on  the  preferred  stock;  holders 
of  the  common  stock,  who  had  had  their  revenue  halved 
three  months  before,  were  now  cut  off  altogether.  Down  and 
down  went  the  price  of  the  corporation's  securities.  "  Steel 
common"  was  recommended  as  cheap  wall-paper,  and  the 
comic  papers  reported  that  grocers  were  giving  away  a  share 
with  every  purchase  of  a  pound  of  tea. 

There  was  a  general  outcry  from  those  who  saw  their 
dollars  cut  in  half.  "  The  Steel  Trust  has  robbed  the  people 
of  five  hundred  millions  in  a  single  year,"  said  a  Boston 

241 


THE   ROMANCE   OF   STEEL 

broker.  "With  its  common  stock  at  ten,  it  can  pay  its  debts 
at  the  rate  of  twenty-five  cents  on  the  dollar,"  declared  a 
Chicago  professor.  Twelve  thousand  stockholders  jumped 
overboard  and  swam  ashore  with  heavy  losses.  If  they  had 
remained  on  board  for  a  year  longer,  they  would  have  lost 
nothing.  But  it  was  a  time  of  panic,  when  men  jumped  first 
and  thought  afterward. 

Capital  lost  thirty  millions  which  it  had  been  led  to  expect; 
but  labour  lost  more.  Twenty  thousand  workmen  were  dis- 
charged. Twenty  thousand  homes,  into  which  twenty  million 
dollars  had  flowed  the  previous  year,  were  left  without  re- 
sources. Twenty  thousand  workmen  stood  idle  in  the  market, 
offering  their  skill  for  sale,  and  endangering  the  price  of 
labour  all  along  the  line.  It  was  a  harsh  step,  but  necessary 
from  the  standpoint  of  dividends. 

It  was  a  hard-luck  year,  and  everybody  grumbled — every- 
body except  the  Wall  Street  brokers.  They  did  a  merry 
business,  pulling  down  what  they  had  built  up  three  years 
before.  In  fact,  the  stock  exchange  end  of  the  steel  business 
has  grown  until  it  is  larger  than  the  manufacturing  end.  It 
is  a  point  of  great  significance,  for  better  or  for  worse,  that 
the  buying  and  selling  of  steel  stocks  is  to-day  a  business  of 
greater  volume  than  the  buying  and  selling  of  steel. 

THE  RETURN    OF    PROSPERITY 

In  1905  the  horn  of  plenty  was  once  more  emptied  on  the 
heads  of  the  steel  men.  It  was  a  year  of  jubilee.  Before  it 
was  half  over,  the  preferred  stock  had  climbed  above  par 
and  the  common  to  nearly  forty.  The  twenty  thousand  work- 
men came  back,  and  others  with  them.  At  the  annual  meet- 
ing the  stockholders  effervesced  with  delight,  and  passed  a 
vote  of  thanks  to  Mr.  Morgan,  as  the  meeting  happened  to  be 
on  his  sixty-eighth  birthday. 

242 


SIX   YEARS    OF  THE    STEEL   TRUST 

Those  who  regarded  the  United  States  Steel  Corporation 
as  a  finished  product  said,  in  the  dark  days  of  1904,  "  Morgan 
has  failed."  The  wiser  ones,  who  regarded  it  as  a  continuous 
process,  said  "Wait."  Morgan's  supreme  aim  was  to  give 
stability  to  the  iron  and  steel  trade.  He  had  against  him  not 
only  natural  forces,  but  artificial  ones  as  well.  He  had  to 
fight  against  a  depression  caused  by  bad  crops,  or  a  panic 
caused  by  some  speculative  buccaneer. 

Now,  if  there  is  one  thing  that  Morgan's  strong  nature 
hates  more  than  another,  it  is  something  that  is  small,  flimsy, 
and  uncertain.  He  abhors  makeshifts.  His  lasting  honour 
will  be  that  he  has  been  the  first  American  who  deliberately 
made  it  his  life-work  to  co-ordinate  the  various  functions  of 
industry  and  finance  on  a  national  scale.  With  a  masterful- 
ness which  has  never  been  surpassed,  he  linked  together 
railroads,  banks,  steamship  lines,  industrial  corporations,  and 
two-thirds  of  the  iron  and  steel  trade.  He  had  to  use  refrac- 
tory materials.  Neither  his  friends  nor  the  public  understood 
his  purposes.  He  was  compelled  to  work  with  many  men 
who  lied  to  him  and  betrayed  him.  His  so-called  partners 
were,  comparatively  speaking,  no  more  than  clerks.  He  stood 
alone,  a  Gulliver  among  the  Lilliputians  of  Wall  Street. 

In  1901  many  critics  pointed  out  that  the  demand  for  divi- 
dends by  a  mob  of  stockholders  would  be  likely  to  take  too 
much  money  out  of  the  business  and  allow  the  plants  to  depre- 
ciate. There  was  good  reason  for  this  warning.  Hundreds 
or  iron  and  steel  men  had  wrecked  their  fortunes  on  the  big- 
dividend  rock.  Even  the  late  Russell  Sage,  clever  financial 
pilot  as  he  was,  could  not  steer  past  this  peril.  Sage  was  in 
the  iron  business  in  1866 — as  early  as  Carnegie.  He  had  a 
large  share  in  Captain  Ward's  Milwaukee  rolling-mill;  but 
he  made  the  usual  mistake  of  demanding  enormous  profits 
at  once. 

"  Sage  made  my  life  miserable  because  we  did  not  pay 

243 


THE   ROMANCE   OF   STEEL 

higher  dividends,  although  we  paid  from  fifteen  to  twenty 
per  cent,  for  several  years,"  said  J.  J.  Hagerman,  who  was 
then  an  official  of  the  company.  Those  who  remained  in  that 
Milwaukee  enterprise  made  millions;  but  Russell  Sage  lacked 
the  farsightedness  to  be  a  steel-maker.  Like  hundreds  of 
others,  he  had  his  chance  and  lost  it. 

Every  successful  steel-maker  knows  that  improvements 
must  be  made  continually,  whether  any  money  is  left  for 
dividends  or  not.  To  look  at  the  figures  given  out  by  the 
corporation  was  not  convincing.  In  annual  reports  things 
are  not  always  what  they  seem.  Such  has  come  to  be  the 
public  opinion.  When  fifty  millions  of  preferred  stock  were 
changed  into  bonds  in  1902,  it  was  stated  that  thirty  millions 
of  it  went  for  improvements.  Ten  millions  a  year  were  appro- 
priated for  "special"  work  of  this  sort,  and  in  each  annual 
report  there  were  several  pages  of  "  improvements  and  extra- 
ordinary replacements "  mentioned  by  name. 

"  Improving  our  own  plants  is  the  key-note  of  the  United 
States  Steel  Corporation,"  said  its  first  vice-president,  James 
Gayley. 

But  the  only  way  to  know  whether  the  property  of  the 
corporation  is  rising  in  value,  or  falling,  is  to  go  and  see  it. 
Consequently,  in  gathering  the  information  for  this  series  of 
articles,  I  was  careful  to  ask  at  every  stopping-place,  "  Show 
me  what  improvements  have  been  made  since  1901."  After 
nearly  six  thousand  miles  of  travel,  I  have  not  found  a  single 
instance  in  which  a  property  has  been  allowed  to  depreciate, 
or  in  which  improvements  have  been  made  in  a  parsimonious 
way. 

"  Everything  the  United  States  Steel  constructs  is  first- 
class,"  said  one  of  Duluth's  leading  business  men. 

"  I  want  you  to  build  that  store  for  all  time — no  make- 
shifts," said  the  vice-president  of  the  Union  Supply  Company 
to  a  contractor. 

244 


JAMES   GAYLE* 


'"*'    OFTHE 

I  UNIVERSITY 

OF 


SIX   YEARS   OF  THE   STEEL   TRUST 

The  corporation  operates  fifty  stores  under  this  name  in 
its  coal  and  coke  region,  and  the  order  given  by  the  vice- 
president  was  not  a  mere  phrase  for  effect,  as  I  overheard  it 
accidentally. 

THE    PARAGON    OF    COAL-MINES 

The  Traveskyn  coal-mine,  near  Pittsburgh,  which  was 
built  entirely  by  the  corporation,  has  probably  no  equal  in 
the  world  for  safety,  convenience,  and  efficiency.  It  is  a 
mine  without  a  mule.  All  its  hauling  is  done  by  four  six-ton 
electric  locomotives,  on  a  double-track  road,  without  a  grade 
anywhere  of  more  than  eighty  feet  to  the  mile.  This  is  a 
saving  of  twenty  men  as  compared  with  the  mule  system,  and 
keeps  the  mine  much  cleaner.  The  mine  is  lit  with  electric 
lights  from  end  to  end.  Its  walls  near  the  pit's  mouth  are 
white-washed.  A  twelve-thousand-dollar  ventilating  appa- 
ratus blows  through  it  a  constant  stream  of  fresh  air.  An 
independent  telephone  system,  with  eighteen  instruments,  con- 
nects the  superintendent  with  every  part  of  the  mine. 

The  four  hundred  workmen  live  in  neat  cottages,  scattered 
through  a  grove  of  trees.  Each  house  has  from  three  to  six 
rooms,  and  rents  for  two  dollars  a  room.  A  few  of  the  men 
make  a  hundred  and  fifty  dollars  a  month,  but  the  average 
wages  are  half  as  much.  The  output  of  the  mine  is  two  thou- 
sand tons  a  day — five  tons  per  man.  In  the  past  dozen  years 
I  have  seen  many  mines,  in  this  country  and  Great  Britain, 
but  never  one  like  this. 

A   STEEL-TRUST   COKE   PLANT 

At  Uniontown,  Pennsylvania,  is  a  coke-making  plant,  made 
entirely  by  the  United  States  Steel  Corporation.  Here,  too, 
the  same  good  management  and  free  expenditure  of  capital 
can  be  seen.  We  shoot  down  the  steam-hoist  in  a  few  seconds, 
making  the  three-hundred-foot  trip  more  slowly  than  if  we. 

245 


THE   ROMANCE   OF   STEEL 

were  cars  of  coal.  The  mine  below  is  practically  a  little 
village  of  two  square  miles.  As  it  is  a  gaseous  mine,  no  elec- 
tricity is  used,  except  in  the  stable.  This  stable  is  one  of  the 
sights  of  the  whole  mining  region,  being  built  entirely  of 
cerhent  and  bricks.  Not  a  splinter  of  wood  is  to  be  seen, 
making  fire  impossible.  It  has  stalls  for  fifty  mules,  yet  at 
the  time  that  I  went  through  it  it  was  as  clean  as  a  garage, 
the  sloping  cement  floor  making  it  possible  to  flush  it  thor- 
oughly. Several  chickens  were  picking  up  grain  in  the  hay- 
room.  The  walls  were  white -washed.  There  was  nothing 
dirty,  nothing  repulsive,  even  in  the  mules'  part  of  the  mine. 
The  Steel-Trust  mule  is  the  aristocrat  of  his  species. 

The  four  hundred  miners  live  in  four- room  or  five-room 
houses.  Thirty  of  them  have  bought  their  own  homes.  They 
are  all  Huns  and  Slavs.  For  wages,  they  average  from  two 
to  three  dollars  a  day.  For  rent,  they  pay  seven  to  nine 
dollars  a  month. 

"  One  of  the  miners,"  said  E.  H.  Abraham,  the  superin- 
tendent, "  went  back  to  Hungary  last  month  with  nine  thou- 
sand dollars  in  his  pocket,  the  savings  of  twenty-three  years. 
He  worked  in  the  mine  until  two  hours  before  train-time,  so 
as  not  to  lose  even  half  a  dollar." 

The  men  seemed  to  be  both  contented  and  independent. 
One  of  them  had  opened  a  grocery  store  in  opposition  to  the 
store  owned  by  the  company.  In  the  whole  community  there 
was  nothing  dilapidated  or  untidy.  Even  around  the  engine- 
house  and  the  shaft's  mouth  little  cinder-paths  had  been  made. 
These  were  so  trim  as  to  look  almost  out  of  place  to  one  who 
is  familiar  with  coal-mines.  One  would  as  soon  expect  to 
see  a  bunch  of  baby-ribbon  on  a  pickaxe. 

Here,  also,  were  two  new  inventions — a  hot-air  flue  from 
the  coke-ovens  to  the  furnaces,  and  a  machine  for  drawing 
coke  out  of  the  ovens.  The  hot-air  flue  is  on  a  small  and 
experimental  scale,  but  it  saves  the  salary  of  the  superinten- 

246 


SIX   YEARS    OF  THE   STEEL   TRUST 

'dent.  It  is  the  simplest  possible  arrangement.  A  brick  flue 
runs  underground  from  the  coke-ovens  to  six  furnaces,  and 
carries  the  hot  air  to  the  boilers.  The  greatest  distance 
between  any  oven  and  the  furnaces  is  seven  hundred  feet. 
The  heat  obtained  registers  eighteen  hundred  degrees,  and 
can  be  regulated  by  dampers.  It  costs  nothing,  except  for 
bricks  and  labour.  For  three  years  it  has  been  saving  eight 
hundred  bushels  of  coal  a  day,  besides  the  wages  of  stokers. 
As  the  corporation  has  about  eighteen  thousand  blazing  coke- 
ovens,  all  wasting  their  heat  except  the  few  at  Uniontown,  this 
brick-flue  idea  may  become  an  important  saving,  especially 
if  the  price  of  coal  is  increased. 

1  The  coke-drawer  has  not  proved  such  a  complete  success,1 
being  liable  to  break  the  coke;  but  when  it  is  improved  and 
made  to  act  more  gently,  it  will  displace  thousands  of  Huns 
and  Slavs.  The  one  now  in  operation  can  do  the  work  in 
one-sixth  of  the  time  formerly  required.  By  means  of  a 
hook  and  an  endless  carrier,  it  both  draws  the  coke  and  loads 
it  on  the  cars.  Sooner  or  later  it  will  revolutionise  the  whole 
coke  trade. 

A   GREAT   NEW   STEEL   CITY 

Under  the  head  of  improvements,  the  Steel  Trust  has  even 
begun  to  build  a  whole  city — a  city  as  large  as  Albany,  Rich- 
mond, or  Atlanta.  Gary,  as  it  will  be  called,  is  near  Chicago 
on  the  Indiana  shore  of  Lake  Michigan.  It  will  be  by  far  the 
largest  made-to-order  city  in  the  world.  There  will  be  a 
square  mile  of  furnaces  and  steel-mills,  with  eighteen  thou- 
sand men  making  five  times  their  own  weight  of  open-hearth 
steel  every  day. 

One  year  ago  the  city  was  begun.  A  river  was  pushed 
out  of  its  bed;  a  town  was  moved  out  of  the  way;  and  another 
was  bought  to  house  the  workmen.  In  four  years,  perhaps, 
it  will  be  finished.  It  will  be  a  municipal-ownership  city. 

247 


THE  ROMANCE   OF  STEEL 

The  workmen  will  have  a  chance  to  own  their  homes.  Saloons 
will  be  forbidden;  and  a  park  will  stretch  along  the  lake 
shore.  Fully  seventy-five  million  dollars  will  be  spent  on 
the  plant  alone,  making  it  without  an  equal  in  any  country. 

All  along  the  line  of  smoke  in  Pennsylvania  and  Ohio  the 
same  story  is  told — "everything  that  the  corporation  builds 
is  first-class."  In  the  ore  regions  the  little  wooden  ore-cars 
are  being  replaced  by  large  steel  cars.  Last  year  nearly  a 
hundred  million  dollars'  worth  of  ore  was  taken  out,  and 
about  five  millions  spent  on  improvements.  In  the  ore  fleet 
we  find  that  the  smaller  ships  are  being  sold,  to  be  replaced 
by  steel  vessels  of  the  largest  and  latest  model.  Last  year 
four  new  ones  were  built,  nine  feet  longer  than  the  longest 
on  the  Lakes,  and  carrying  ten  thousand  tons  apiece.  These 
steel  ships  are  standardised  to  such  a  degree  that  they  can  be 
lengthened  when  necessary.  Seven  were  recently  pulled 
apart  and  made  seventy-two  feet  longer.  At  Youngstown, 
where  there  is  more  room  for  growth  than  in  Pittsburgh, 
fifteen  thousand  people  have  lately  been  added  to  the  city's 
population  by  a  twenty-million-dollar  addition  to  the  works 
of  the  United  States  Steel  Corporation.  And  so  we  might 
continue  through  several  pages. 

Instead  of  the  old  "  hit-or-miss "  methods  of  making  steel, 
a  steel  plant  has  now  become  a  vast  chemical  laboratory.  An 
order  comes  to-day  with  the  exactness  of  a  medical  prescrip- 
tion. Here,  for  instance,  is  one  which  I  was  permitted  to 
copy: 

Send  me  5000  tons  pig — 2  per  cent,   carbon,  less  than  o.i   per  cent, 
phosphorus,  21-2  per  cent,  silicon,  and  no  sulphur. 

Making  iron  and  steel  is  not  only  a  trade.  It  is  a  profes- 
sion, and  may  some  day  be  an  art.. 

From  Alabama  to  Minnesota,  and  from  Connecticut  to 
Colorado^  I  asked  this  question : 


SIX   YEARS    OF  THE    STEEL   TRUST 

"  Has  consolidation  given  more  or  less  stability  to  the 
trade?" 

"  More,"  was  the  answer,  without  a  single  exception.  The 
price  of  steel  rails,  after  twenty-five  years  of  zig-zagging  be- 
tween seventeen  dollars  and  seventy-five  dollars,  was  nailed 
fast  at  twenty-eight  dollars  a  ton.  The  railroads  tried  to 
break  the  price  to  twenty-three  dollars  during  the  slump  of 
1903.  Recently  several  companies  offered  thirty-two  dollars 
— four  dollars  more  than  the  market  price — in  order  to  have 
their  rails  immediately  delivered.  Both  offers  were  refused. 

"  Our  price  is  twenty-eight  dollars  a  ton — no  more,  no  less," 
said  Morgan. 

As  a  result,  the  railroads  are  being  taught  to  order  rails 
steadily,  instead  of  waiting  for  slumps  and  bargain  sales. 
Ore,  too,  has  been  steadied  to  about  three  dollars  a  ton,  and 
freight  rates  on  ore  have  been  made  uniform. 

THE  STEEL  TRUST  AND  ITS  WORKMEN 

In  regard  to  labour,  the  Morgan  policy  has  been  to  secure 
stability  by  first  destroying  trade  unions  and  afterward  per- 
mitting the  employees  to  become  stockholders.  Several 
months  after  the  corporation  was  organised,  the  Amalga- 
mated Association  of  Iron  and  Steel  Workers — or  what  was 
left  of  it  after  the  decisive  defeat  of  Homestead — picked  a 
quarrel  over  a  small  issue,  and  declared  war  on  the  big  com- 
pany. Probably  not  more  than  ten  per  cent,  of  the  workmen 
belonged  to  the  union,  but  it  issued  manifestoes  ordering  a 
hundred  thousand  to  quit  work. 

"We  must  fight  or  give  up  our  personal  liberties,"  said 
one  of  the  leaders.  "The  United  States  Steel  Corporation 
thinks  you  were  sold  to  them  just  as  the  mills  were ;  but  when 
you  strike,  Wall  Street  will  tremble!" 

On  the  contrary,  Wall  Street  paid  little  or  no  attention  to 

249 


THE  ROMANCE  OF  STEEL 

the  strike.  Stocks  fell  three  per  cent,  and  rose  again.  The 
labour  leaders  found  that  going  to  Morgan  was  a  different 
proposition  from  going  to  John  Fritz  or  Captain  "Bill" 
Jones.  "  Schwab  treated  us  well — Morgan  did  not,"  said 
one  of  the  labour  leaders  as  he  came  down  the  steps  of  the 
Morgan  office.  The  probability  is  that  Morgan  knew  the 
truth — knew  that  the  Amalgamated  Association  was  a  lath 
painted  to  look  like  iron,  and  treated  the  leaders  accordingly. 
After  an  ineffective  strike  of  two  months  or  more,  all  the 
workmen  returned  to  work. 

In  three  ways,  at  least,  the  strike  had  been  a  positive  benefit 
to  the  corporation.  It  had  demolished  the  Amalgamated 
Association,  raised  the  prices  of  steel,  and  enabled  Schwab  to 
dismantle  the  out-of-date  mills  and  concentrate  the  plants. 
Since  then  the  corporation  has  been  strictly  nonjiaioci. 
Schwab  went  so  far  as  to  make  anti-union  speeches.  There 
was  to  be  none  of  the  old  mutualism  between  capital  and  labour 
under  the  new  regime.  The  corporation  was  not  a  democracy 
in  which  the  authority  came  from  below.  It  was  a  feudalism 
of  capital,  in  which  power  moved  from  Morgan  downward, 
through  a  series  of  distinct  gradations. 

But  it  was  to  be  a  "benevolent  feudalism."  There  was  no 
intention  of  turning  the  wage  system  into  a  wage  slavery.  To 
keep  the  workmen  loyal  and  content,  a  method  of  profit- 
sharing  was  worked  out.  George  W.  Perkins  was  its  orig- 
inator, having  tried  a  similar  plan  with  his  life  insurance 
agents.  He  proposed  to  offer  a  certain  quantity  of  preferred 
stock  every  year  to  the  employees.  To  prevent  speculative 
purchases,  no  one  would  be  allowed  to  buy  more  stock  at  one 
time  than  one-fifth  of  his  yearly  wages.  Those  who  lacked 
the  cash  could  pay  in  instalments,  and  special  inducements 
were  offered  to  those  who  remained  in  the  employ  of  the  cor- 
poration for  five  years.  In  this  way  the  company  forged 
another  weapon  against  unionism  and  strikes. 

250 


SIX   YEARS   OF  THE    STEEL   TRUST 

As  soon  as  this  plan  was  seen  to  be  a  success — for  more  than 
twenty-seven  thousand  employees  subscribed  for  stock  in 
1903  alone — another  step  was  taken.  The  wages  of  the  men 
were  "  equalised."  The  highly  paid  men  were  cut  down 
from  ten  to  fifty  per  cent,  while  the  labourers  were  raised  to 
$1.80  and  $2.00  a  day.  In  some  of  the  works  the  hours  of 
labour  were  increased.  "  I  used  to  be  able  to  make  six  dollars 
a  day,  working  seven  hours,"  said  a  Pittsburgh  rougher. 
"  Now  I  can  only  make  three  seventy  a  day,  working  twelve 
hours." 

THE    MAN    AND    THE    MACHINE 

In  the  American  steel-mills  the  machine  does  more  work 
than  the  man,  and  draws  higher  wages.  Naturally  the  man  feels 
that  he  and  his  machine  are  one,  and  not  two.  He  wants  the 
machine's  wages  paid  to  him;  and  so,  no  matter  how  high 
his  pay  may  be,  he  feels  that  there  has  been  a  maldistribution 
of  profits  when  he  thinks  of  what  he  and  his  machine  pro- 
duced. 

On  the  whole,  a  larger  sum  is  paid  to  iron  and  steel  workers 
to-day  than  they  ever  received  before.  There  have  been  sev- 
eral voluntary  raises  of  wages.  Last  year  the  Frick  Coal 
company  put  seven  per  cent,  more  in  the  pay-envelopes  of  its 
labourers.  Thirty  thousand  men  in  the  Pittsburgh  region  are 
drawing  nine  millions  more  this  year  than  last.  Pittsburgh 
remains  the  place  of  the  heaviest  work  and  the  highest  wages 
of  any  manufacturing  region  in  the  world. 

"  We  have  rollers  and  heaters  at  Homestead  who  are  still 
making  from  ten  to  fifteen  dollars  a  day,"  said  President 
Dinkey. 

The  United  States  Steel  Corporation  has  made  no  attempt 
to  build  "  model  towns "  for  its  workmen,  after  the  fashion 
of  the  Krupps.  Vandergrift,  the  only  "model  town"  of 
steel-workers  in  the  United  States,  is  now  a  part  of  the  corpo- 

251 


THE  ROMANCE   OF   STEEL 

ration's  dominions,  but  it  was  built  previous  to  1901  by 
George  G.  McMurtry.  This  really  picturesque  spot  lies 
thirty-eight  miles  east  of  Pittsburgh.  It  has  been  christened 
a  "  workingman's  paradise,"  and  overpraised  by  many  writers; 
but  it  remains  the  most  attractive  town  among  the  iron  and 
steel  communities.  Frederick  Law  Olmsted,  the  late  eminent 
landscape-gardener,  planned  it.  His  hand  can  be  seen  in  the 
curving  streets  and  decorative  grass-plots. 

Apparently,  the  corporation  has  solved  the  problem  of 
stability  so  far  as  labour  is  concerned.  The  workmen  have 
neither  union  or  leader.  They  have  not  even  a  spokesman 
who  is  well  known  and  respected.  All  their  former  leaders 
have  been  swallowed  up  by  politics.  Compared  with  the 
members  of  a  well-organised  trade  like  the  bricklayers,  for 
example,  they  are  not  highly  paid  for  such  work  as  they  do 
and  such  risk  as  they  run.  The  ten-dollar-a-day  men  are 
few  and  far  between.  Strictly  speaking,  they  are  foreman 
rather  than  ordinary  wage-workers.  But  the  majority  of  the 
steel-workers  are  content  for  two  reasons — they  are  making 
more  money  than  they  could  earn  in  the  average  outside  occu- 
pation,  and  their  work  is  ^ea^ierjthan  it  used  to  be.  If  the 
"era  of  good  feeling"  has  not  been  reached  among  the  rank 
and  file  of  the  corporation,  there  has  at  least  come  the  era  of 
loyalty  and  obedience. 

The  danger,  if  there  be  any  danger,  in  the  labour  situation 
will  not  come  from  the  discontented,  but  from  the  servile.  I 
have  found  it  to  be  the  general  opinion  of  practical  steel- 
makers that  the  trade  was  being  pulled  down  by  the  employ- 
ment of  such  large  numbers  of  unskilled  immigrants,  who  can 
never  be  trained  beyond  a  certain  point.  The  sudden  dearth  of 
skilled  steel-workers  last  year  shows  this  to  be  a  present  dan- 
ger, not  a  future  one.  In  the  great  school  of  steel-making, 
the  lower  grades  are  filled  entirely  with  pupils  who  can  never 
be  promoted.  The  Huns,  Slavs,  Finns,  and  Italians  who 

252 


SIX   YEARS    OF  THE    STEEL   TRUST 

form  the  main  body  of  the  workers  never  rise  above  the  posi- 
tion of  common  labourers,  except  in  the  most  unusual  instances. 

They  have  hands  but  no  heads.  Among  them  are  no  embry- 
onic Schwabs  or  Coreys. 

"  Perhaps  the  reason  why  we  have  so  little  machinery  in 
the  coke  business  is  because  we  have  employed  the  non- 
inventive  Huns  and  Slavs,"  admitted  a  high  official  of  the 
corporation.  Most  of  the  improvements  have  been  originated 
by  men  like  Jones  and  Fritz,  who  began  at  the  bottom  and 
worked  their  way  up,  improving  as  they  went.  It  has  also 
been  found  that  cheap  men  and  costly  machinery  make  a  dan- 
gerous combination.  It  is  apt  to  kill  the  men  and  injure 
the  machinery. 

In  the  "  good  old  days "  of  the  puddlers,  the  labour  force 
was  unruly,  but  intelligent  and  teachable.  To-day  it  is  obedi- 
ent, but  stolid.  The  coke-making  squad  is  wholly  Hun  and 
Slav.  The  ambitious  Welsh  have  long  since  been  driven  out. 
The  ore-mining  squad  is  almost  wholly  Finn  and  Italian. 
Of  these  two,  there  is  more  hope  of  the  Finn.  In  my  whole 
investigation,  I  found  no  class  of  labourers  lower  than  the 
Italians  of  the  Lake  Superior  ore  region.  At  a  Mesaba  mine 
I  found  four  Italian  miners  living  in  a  log  shanty.  When  I 
opened  the  door,  three  were  in  the  one  bed,  with  no  clothing 
removed  except  their  boots.  The  fourth  was  squatting  on  the 
floor,  eating  his  breakfast.  For  a  table  he  had  the  sawed-off 
end  of  a  log.  In  one  hand  he  held  half  a  loaf  of  bread,  and 
with  the  other  he  helped  himself  from  a  tin  dish  of  macaroni. 
No  knife — no  fork — no  spoon!  It  is  not  the  work  of  such 
as  these  that  has  made  the  industry  great  and  put  American 
steel  into  all  the  markets  of  the  world. 

THE   CRITICS    OF   THE   TRUST 

So  far  as  I  have  found,  there  is  very  little  criticism  of  the 
Steel  Trust  by  its  workmen.  The  skilled  men  are  too  ambi- 

7- 


THE   ROMANCE   OF   STEEL 

tious,  and  the  labourers  are  too  stolid,  to  make  any  open  pro- 
tests against  the  prevailing  conditions.  From  the  point  of  view 
of  improvements,  no  fault  can  be  found.  In  every  line  the  cor- 
poration has  the  best  that  millions  can  buy.  As  for  the  inde- 
pendents, they  are  as  blithe  and  care-free  as  though  the 
corporation  had  been  organised  for  their  especial  benefit. 
Politicians,  from  the  first,  have  made  little  or  no  trouble  for 
it.  Ex-Governor  Douglas,  of  Massachusetts,  made  it  one  of 
the  targets  in  his  campaign  against  the  Dingley  tariff,  assert- 
ing that  "  the  Steel  Trust  alone  reaps  eighty  millions  a  year 
out  of  protection,  and  sells  its  steel  to  foreign  nations  for  less 
money  than  it  charges  to  us."  An  Arkansas  Congressman,  at 
the  beginning  of  1905,  succeeded  in  having  a  resolution  passed, 
calling  for  a  public  investigation  of  the  big  combine.  But 
Morgan  has  not  overlooked  the  political  end.  The  corpora- 
tion has  strong  friends  at  court;  and  its  policy  of  publicity 
has  made  it  our  least  unpopular  trust. 

Several  theorists,  both  radical  and  conservative,  have 
objected  stubbornly  to  the  corporation  as  a  "  social  menace  " ; 
but  as  this  story  of  things-as-they-are  has  nothing  to  say  about 
theories,  we  can  pass  on.  In  fact,  the  only  serious  criticisms 
that  are  now  being  made  come  from  the  steel-makers  of  the 
old-fashioned  kind,  who  dislike  the  new  methods. 

"  When  I  was  a  young  man  in  the  steel  business,"  said  one 
Pittsburgh  veteran,  "  the  conversation  used  to  be  about  iron 
and  steel.  Now  it  is  about  stocks  and  bonds." 

One  of  the  corporation's  highest  officials  corroborated  this. 

"Wall  Street  is  the  rotten  spot  in  the  apple,"  he  confessed. 
"But,"  he  added,  "we  have  overcome  so  many  obstacles  in 
the  past  fifty  years  that  it  is  not  likely  that  a  handful  of  specu- 
lators will  wreck  us  now." 

Perhaps  the  most  common  objection  I  heard  is  that  the 
corporation  is  too  much  of  a  machine.  Some  of  the  superin- 
tendents complained  frankly  of  the  lack  of  sentiment.  They 

254 


SIX   YEARS    OF  THE    STEEL   TRUST 

felt  like  cogs  in  a  wheel,  and  the  feeling  was  not  a  pleasant  one. 
Above  them  was  a  vague,  impersonal  power.  Business  was 
no  longer  a  man-to-man  and  face-to-face  affair.  Far  off,, 
somewhere  in  a  New  York  skyscraper,  was  a  financial  Provi- 
dence that  guided  all  things  according  to  its  mysterious  will. 

"We  used  to  be  working  for  one  man — a  man  who  knew 
us  all  personally  and  kept  in  touch  with  us.  It's  different 
now,"  said  one  of  the  men  who  had  been  a  Carnegie  partner. 

"  I  have  worked  the  greater  part  of  my  life  for  individuals, 
and  a  few  years  for  corporations,"  said  John  Fritz,  the  Grand 
Old  Man  among  the  practical  steel-makers  of  America.  "  If 
I  had  my  life  to  live  over  again,  I  would  not  work  a  day 
for  a  corporation.  What  is  often  said  of  corporations  is  true 
—they  have  no  bodies  to  be  kicked  and  no  souls  to  be  damned. 
A  corporation  will  do  what  none  of  its  directors  individually 
would  think  of  doing.  It  cannot  manage  workmen  properly. 
It  treats  them  as  if  they  were  machines.  It  weeds  out  the  best 
men — those  who  are  intelligent  and  free-spirited.  I  believe 
in  enforcing  discipline,  but  I  know  that  sullen  and  dispirited 
men  never  did  good  work  and  never  can." 

WHAT    THE    TRUST   MEN    CLAIM 

But  what  does  the  Steel  Trust  itself  say?  Generally  speak- 
ing, since  the  retirement  of  Schwab  from  the  presidency  in 
1903,  it  has  adopted  the  policy  of  Standard  Oil — "  Say  noth- 
ing and  saw  wood."  But  I  have  been  fortunate  in  securing 
from  the  "  big  three  "  of  the  corporation — Gary,  Perkins, 
and  Frick — a  summing-up  of  what  has  been  accomplished  in 
its  six-year  lifetime. 

"What  have  we  done  in  six  years?"  repeated  Gary. 
"  Well,  we  have  been  so  busy  that  this  is  the  first  time  I 
have  tried  to  sum  up.  In  an  off-hand  way,  I  might  enumerate 
our  achievements  as  follows : 

255 


THE   ROMANCE   OF   STEEL1 

"We  have  acquired  extensive  holdings  of  ore  and  coal 
of  the  best  quality. 

"We  have  increased  the  productive  capacity  of  our  fur- 
naces and  mills  by  about  thirty-three  per  cent. 

"We  have  reduced  the  cost  of  manufacturing  by  about  ten 
per  cent,  through  improvements  and  better  conditions. 

1  We  have  improved  our  organisation  by  the  careful  selec- 
tion of  men  and  by  the  interchange  of  ideas  among  the  officials 
of  the  subsidiary  companies.  We  have  established  a  system 
of  civil  service  throughout  our  plants,  so  that  a  competent 
workman  can  rise  to  his  proper  level. 

"  We  have  won  the  good  will  of  our  employees  by  making 
thirty  thousand  of  them  shareholders  in  the  company,  and  by 
paying  them  an  extra  bonus  for  continued  service. 

"We  have  systematised  and  extended  our  foreign  trade. 
We  export  a  million  tons  a  year  to  all  parts  of  the  world, 
resulting  in  increased  tonnage  and  profit  to  the  company. 

"We  have  established  good  relations  with  all  public  offi- 
cials, by  making  public  our  affairs  and  inviting  criticism. 

"We  are  on  friendly  terms  with  all  our  competitors. 

"  We  have  been  the  most  effective  influence  in  maintaining 
stability — in  preventing  extremely  low  or  extremely  high 
prices. 

"  Last,  and  perhaps  the  greatest  achievement  of  all,  we 
have  obtained  a  finance  committee  which  has  never  been 
equalled,  either  for  the  high  calibre  of  the  men  composing  it 
or  for  the  interest  they  take  in  its  work. 

"  As  to  over-capitalisation,"  said  Judge  Gary  emphatically, 
"  I  want  to  say  this.  On  the  basis  of  the  actual  original  cost  of 
our  properties,  our  stock  issue  was  excessive.  But  on  the  basis 
of  actual  present  value,  estimating  from  what  the  properties 
would  cost  to  reproduce  to-day,  or  from  what  they  can  earn, 
there  is  no  over-capitalisation — not  a  dollar." 

256 


JOSHUA    RHODES 


SIX   YEARS   OF  THE   STEEL   TRUST 

Mr.  Frick,  when  asked  to  outline  what  the  corporation 
had  done  in  six  years,  was  less  sweeping  in  his  claims. 

"  In  the  first  place,"  he  said,  "  it  should  be  said  that  we 
have  had  five  good  years.  There  has  been  no  panic — no  hard 
year  like  1896.  If  there  had  been  such  a  year,  it  is  a  doubtful 
question  whether  or  not  the  young  corporation  would  have 
come  through  safely.  It  began  business  with  less  ready  cash 
than  it  should  have  had.  But  trade  was  wonderfully  brisk, 
and  the  company  is  now  in  good  shape — much  better  than 
in  1903. 

"  I  believe  that  a  great  mistake  was  made  in  beginning  to 
pay  dividends  on  the  common  stock  from  the  first.  Better 
have  waited  a  while.  But  the  common  stock  is  to-day  a  good 
investment — not  for  small  investors,  but  for  large  ones.  It 
is  only  for  those  who  can  afford  to  wait — for  those  who  can 
buy  a  large  block  of  it  and  hold  on  until  the  big  dividends 
come.  It  is  a  speculative  stock,  not  a  steady  one  for  those 
who  have  small  incomes. 

"  If  the  company  were  to  be  mismanaged,  we  have  every 
reason  to  believe  that  the  government  would  interfere.  As 
long  as  it  is  well  managed,  as  now,  there  will  be  no  slump. 
There  will  be  fewer  ups  and  downs  in  the  future  than  there 
have  been  in  the  past.  To-day,  if  we  have  a  bad  year,  we 
have  a  whole  world-market  for  a  dumping  ground.  A  slight 
depression  does  not  hurt  the  trade.  On  the  contrary,  in  my 
experience,  I  have  found  that  it  acts  as  a  stimulant  to  bring 
down  costs." 

"  The  two  greatest  achievements  of  the  United  States  Steel 
Corporation,"  said  George  W.  Perkins,  "  are,  first,  the  rescue 
of  the  steel  business  from  one-man  power  and  from  a  threat-' 
ened  industrial  war  which  would  have  had  the  most  disas- 
trous results  upon  American  industry;  and  second,  the  averting 
of  a  trade  depression  in  1903. 


^57 


THE   ROMANCE   OF   STEEL 

"Some  sensational  writers  have  said,"  continued  Mr.  Per- 
kins, "  that  the  United  States  Steel  has  caused  a  loss  of  tens 
of  millions  to  investors.  To  make  such  a  statement  is  unfair. 
Why  don't  they  tell  the  public  what  it  saved  the  country  by 
keeping  all  the  steel-mills  and  furnaces  running  during  an 
unavoidable  depression  of  trade?  The  depression  of  1903 
was  the  first  one  in  the  history  of  the  world  in  which  the 
average  steel-worker  didn't  suffer  severely. 

"  The  fall  in  the  price  of  stock  was  temporary.  Those  who 
held  on  lost  nothing;  and  as  for  the  corporation  itself,  it  had 
enough  money  in  the  treasury  to  pull  through  without  bor- 
rowing a  dollar.  Look  back  over  the  tragic  history  of  steel 
companies,  and  you  will  see  that  this  was  a  wonderful  accom- 
plishment." 

In  the  first  five  years  of  its  infancy  the  United  States  Steel 
Corporation  has  paid  about  a  billion  dollars  to  capital  and 
labour — more  than  half  to  the  latter.  At  the  end  of  its  sixth 
year  it  stands  with  $70,000,000  of  cash  in  its  treasury — with 
more  than  200,000  employees — and  with  a  total  pay-roll  of 
$150,000,000  a  year.  No  other  business  has  done  so  much  to 
enrich  the  whole  nation,  or  to  give  immense  fortunes  to  so 
many  individuals.  Those  who  have  followed  this  story  from 
its  first  chapters  can  now  understand  why  New  York  alone 
contains  more  millionaires  than  London,  Paris,  and  Berlin 
combined.  They  can  also  realise  the  industrial  greatness  of 
Pittsburgh, 


258 


CHAPTER   IX 
PITTSBURGH 

A  City  which  Takes  Rank  Industrially,  Not  with  Other  Towns,  but  with 
Nations — Though  Eleventh  among  American  Cities  in  the  Number  of 
Its  Inhabitants,  This  Energetic  Centre  Has  the  Largest  Population  of 
Machinery  Man-Power  in  the  World  —  Incidents  of  Phenomenal 
Growth — The  Social  and  Business  Life  of  the  Pittsburghers — The  Scanty 
Beginnings  of  Civic  Improvement — From  the  Murk  of  the  City  to  the 
Sunshine  of  the  Suburbs — The  History  of  the  City  from  the  Time  when 
It  Was  "  Shannopin's  Town  "  Down  to  the  Present  Day. 

PITTSBURGH  is  more  than  a  city.     It  is  the  acme  of 
activity;  it  is  an  industrial  cyclone.    To  its  steel  mills 
and  furnaces  there  is  no  intermission — no  rest — no  sleep. 
The  blaze  of  its  lurid  fires  is  as  ceaseless  as  the  roar  of  Niag- 
ara.    That  which  is  elsewhere  called  "labour"  is  here  an 
untiring  fury  to  produce.     In  Pittsburgh,  those  three  half- 
tamed  monsters,  fire,  steam  and  electricity,  are  shackled  and 
goaded  into  a  frenzy  of  omnipotence.    It  is  less  like  industry 
than  war — war  with  the  stubbornest  elements  of  nature. 

What  radium  is  among  metals,  Pittsburgh  is  among  cities. 
Both  alike  seem  to  possess  that  secret  of  perpetual  energy 
which  science  cannot  explain.  Mighty  steel  kings  come  and 
go;  Hussey  follows  Cowan,  and  Jones  follows  Hussey,  and 
Carnegie  follows  Jones,  and  the  corporation  follows  Car- 
negie; stocks  may  rise  and  stocks  may  fall,  but  the  fires  of 
Pittsburgh  blaze  on,  as  though  they  were  part  of  the  earth's 
central  conflagration. 

Like  the  Grand  Canon  of  the  Colorado,  there  is  nothing 
else  with  which  we  can  compare  it.  Every  word  we  choose 
has  been  put  to  smaller  uses.  As  a  manifestation  of  human 
power  over  the  hostile  forces  of  nature — as  a  region  of  indus- 

259, 


THE   ROMANCE   OF   STEEL 

trial  magic,  where  the  push  of  a  lever  cuts  through  a  slab  of 
solid  steel  and  the  touch  of  a  button  strikes  a  two-hundred- 
thousand-pound  blow — there  is  no  place  like  Pittsburgh. 

This  wonderful  region  of  sweat  and  gold  is  the  arena  where 
steel  kings  win  their  coronations.  In  this  age  of  iron,  it  is 
the  seat  of  empire,  with  a  grandeur  more  substantial  than  that 
of  Greece  or  Rome.  Under  the  smoke  its  myriads  of  fire- 
demons  are  fashioning  the  raw  material  of  civilisation.  We 
hear  little  of  its  greatness,  because  its  people  are  not  gifted 
with  speech.  They  are  too  busy  to  brag.  They  think  in  dol- 
lars and  feet  and  tons,  not  in  the  flowery  language  of  oratory. 
In  their  minds  lies  a  lurking  contempt  for  words.  The  lever, 
they  believe,  is  mightier  than  pen  or  sword. 

They  are  not  below  poetry,  but  above  it.  Just  as  the  artist 
speaks  in  colours  and  the  prima  donna  in  song,  so  these 
grim,  square-jawed  Titans  express  themselves  in  world-beat- 
ing records  of  production.  It  is  not  a  triumph  of  labour;  it 
is  a  triumph  of  mind.  There  is  no  other  place  where  labour 
does  so  little  and  mind  does  so  much.  It  is  not  muscle  that 
lifts  its  weights  and  carries  its  burdens  and  shapes  its  mas- 
sive ingots.  It  is  mind.  What  is  any  piece  of  its  powerful 
machinery  but  an  idea  that  has  been  made  tangible  in  steel? 

Pittsburgh  is  a  city  of  practical  thinkers.  Its  supremacy 
among  the  steel  cities  of  the  world  is  based  upon  its  superior 
brain-power,  not  up  on  its  muscle  or  its  coal.  It  has  no  use 
for  the  sort  of  thinking  that  produces  nothing.  Its  motto 
is  "Do!"  This  motto  is  faithfully  followed  by  its  average 
citizen.  While  the  typical  Pittsburgh  brain  is  at  its  best  in 
a  Frick  or  a  Julian  Kennedy,  there  are  thousands  of  the 
unknown  rank  and  file  who — though  their  names  will  never 
be  told  in  any  story  of  steel — have  added  to  Pittsburgh's 
greatness  by  their  thought  and  ingenuity. 

The  last  census  rates  Pittsburgh  as  number  eleven  among 
the  largest  American  cities.  This  conveys  a  wrong  impres- 
sion. This  census-taker  counts  people  only,  not  machinery. 

260 


PITTSBURGH 

If  we  count  the  population  of  Greater  Pittsburgh — fully 
eight  hundred  thousand — and  if  we  add  to  this  the  man- 
power of  its  machinery — an  uncounted  number  of  millions — 
it  could  no  doubt  be  shown  that  the  Pittsburgh  district  is  the 
most  populous  in  the  world.  In  no  other  city  are  the  people 
so  few  in  proportion  to  the  output.  The  tonnage  per  man 
is  absolutely  unequalled. 

No  other  American  city  works  so  hard,  with  both  muscle 
and  brain,  to  make  an  honest  living.  There  are  thirty-seven 
States,  out  of  the  forty-five,  which  have  less  to  show  for  a 
year's  work  than  the  Pittsburgh  region.  In  one  short  daily 
whirl  of  the  earth  the  toiling  Pittsburghers  send  away  five 
hundred  and  seventy  million  pounds  of  useful  commodities, 
for  which  they  receive  about  one  million  four  hundred  and 
seventy  thousand  dollars.  What  they  make  in  a  year  would 
fill  thirty-five  thousand  trains  of  cars — every  train  with  fifty 
cars  and  every  car  with  fifty  tons. 

PITTSBURGH    AND    THE    PYRAMIDS 

The  toilers  of  Egypt  were  drones  compared  with  the  strenu-  | 
ous    Pittsburghers.     To  build   their   greatest   pyramid,    the 
Egyptian  slaves — one  hundred  thousand  of  them — laboured 
as  energetically  as   they  knew  how  for  more   than   twenty 
years.    Volumes  have  been  written  to  applaud  their  wonder- 
ful achievement.     It  has  been  called,  by  authors  who  have 
never  seen  Pittsburgh,  "  the  most  gigantic  work  in  the  world 
—one  which  never  has  been,  and  never  will  be,  surpassed." 
But  the  stone  the  Great  Pyramid  contains  weighs  only  seven  V 
million  tons.     Pittsburgh,  in  twenty  years,  could  build  two    \ 
hundred   and   fifty  Great   Pyramids  with   the   commodities    J 
which  it  produces.    A  pyramid,  not  of  stone,  but  of  steel  and  / 
coal  and  glass,  is  merely  a  four  weeks'  job — nothing  more.    * 
The  enormous  traffic  of  the  London  docks  is  the  wonder 
and  pride  of  Great  Britain;  but  Pittsburgh  produces  more 

261 


THE   ROMANCE   OF   STEEL 

in  ten  weeks  than  the  London  docks  handle  in  a  year.  In 
fact,  if  the  Pittsburgh  district  were  located  on  an  island  it 
would  require  all  the  docks  and  ships  of  London,  New  York, 
Antwerp,  Hamburg,  Liverpool,  and  Glasgow  to  carry  away 
its  product. 

The  main  word  in  Pittsburgh  is  "tonnage."  The  city  is 
/  proud  of  its  heavy  products.  Any  business  that  deals  in  light 
\  materials  it  refers  to  as  a  "minor  industry."  It  is  not  only 
I  first  in  iron  and  steel.  It  tops  the  list  in  glass,  electrical  ma- 
chinery, coal,  coke,  fire-brick,  air-brakes,  cork,  pickles,  and 
astronomical  lenses.  The  last  three  items  are  somewhat  out 
of  accord  with  the  others;  but  even  in  the  cork  business  there 
is  a  trade  of  five  million  pounds  a  year. 

Industrially,  Pittsburgh  takes  rank  with  nations  rather  than 
with  cities.  Here,  for  instance,  is  a  fact  which  is  incredible 
to  those  who  have  not  seen  the  murky  wonderland  of  western 
Pennsylvania.  In  all  the  populous  "iron  cities"  of  Great 
Britain,  in  the  combined  Sheffields  and  Newcastles  of  Eng- 
land, Scotland,  and  Wales,  less  iron  and  steel  is  made  than  in 
the  Pittsburgh  district  alone.  As  for  Russia  and  France, 
if  the  Pittsburgh  workers  secured  an  eight-month  year  they 
would  still  produce  more  iron  and  steel  than  both  countries 
combined. 

Germany  is  now  straining  every  muscle  to  capture  the  steel- 
rail  market;  but  if  there  were  seventeen  months  in  the  Ger- 
man year  she  would  still  lag  behind  Pittsburgh.  Suppose  a 
new  railway  were  built  every  year  between  New  York  and 
San  Francisco,  and  double-tracked  for  half  of  the  way — the 
men  of  Pittsburgh  could  supply  every  rail  without  working 
an  extra  day. 

In  the  matter  of  coal,  this  tiny  spot  on  the  map  of  the 

United  States  owns  more  coal  lands  than  Great  Britain,  and 

/digs  more  than  either  France  or  Russia.     Coal  is  the  secret 

(of    its    greatness.     Underneath    its   neighbouring    hills    and 

262 


PITTSBURGH 

watered  valleys  lie  twenty-nine  billion  tons  of  the  black  fuel. 
In  scores  of  subterranean  villages  the  swarthy  Slavs  tunnel 
and  delve  to  keep  the  insatiable  furnaces  fed.  As  long  as 
coal  remains  the  good  genius  of  the  human  race,  Pittsburgh 
is  destined  by  nature  to  be  the  industrial  centre  of  the  world. 
It  is  the  headquarters  of  the  genius  itself. 

As  if  it  were  not  enough  to  surround  Pittsburgh  with  un-\ 
derground  counties  of  coal,  nature  heaped  fuel  on  fuel  and 
stored  the  district  with  natural  gas.  Four  thousand  miles 
of  pipe  carry  it  to  a  thousand  mills  and  to  nearly  every  family. 
At  twenty-five  cents  a  thousand  feet  it  pays  high  profits  on 
an  investment  of  sixty  millions. 

Steel  men  were  slow  to  recognise  the  value  of  natural  gas. 
As  far  back  as  1828  an  enterprising  fellow  named  Thomas 
B.  Campbell  had  secured  a  contract  to  build  and  care  for  a 
lighthouse  at  Barcelona  Harbour,  on  Lake  Erie.  A  mile 
distant  was  a  noted  "  burning  spring."  Campbell  put  a 
fish-barrel  over  this  spring,  made  a  pipe  of  pump-logs  to  the 
lighthouse,  and  lighted  a  flame  that  burned  for  thirty  years. 

But  Pittsburgh  made  no  attempt  to  use  natural  gas  until 
1875,  when  Spang,  Chalfant  &  Co.,  and  Graff,  Bennett  & 
Co.  piped  it  in  from  wells  seventeen  miles  distant.  Nine 
years  later  George  Westinghouse  took  up  the  problem  in 
his  large  way  and  made  the  use  of  natural  gas  common 
thoughout  the  region. 

In  Greater  Pittsburgh  (Pittsburgh,  Allegheny,  and  fifteen 
workshop  towns)  the  total  yearly  earnings  through  the  sale 
of  products  amounts  to  almost  half  a  billion  dollars.  Out 
of  this,  about  seventy-five  million  dollars  is  put  into  the  pay- 
envelopes  of  the  one  hundred  and  fifty  thousand  workmen. 
The  rest  goes  for  machinery,  interest,  raw  material,  and 
profits.  It  it  were  the  deliberate  purpose  of  Pittsburgh  to 
manufacture  millionaires,  it  could  probably,  out  of  its  gains, 
equip  about  a  hundred  and  fifty  every  year  and  send  them 

263 


THE   ROMANCE   OF   STEEL 

out  as  its  finished  products.  Such  is  the  affluence  of  this  land 
of  fire  and  smudge. 

"What  do  you  think?  These  strikers  make  more  than  I 
ever  could  in  the  law  business,"  exclaimed  an  astonished  mem- 
ber of  the  Congressional  committee  in  1892,  during  the 
Homestead  investigation.  This  is  not  a  matter  of  surprise 
in  Pennsylvania,  where  the  earnings  of  a  worker  in  the  steel- 
mills  often  overtop  the  incomes  of  professional  men.  One 
young  roller  whom  I  met  in  Pittsburgh  said: 

"  I  was  a  school-teacher  for  several  years,  but  the  pay  was 
too  small.  I  resigned,  and  went  to  work  as  a  labourer  in  a 
steel-mill.  /In  eleven  months  I  was  promoted  to  be  a  roller, 
and  earned/  nine  dollars  a  day.  My  rise  is  regarded  as  excep- 
tional, but  it  shows  what  can  be  done." 

The  famous  Pennsylvania  pay-car  of  the  United  States 
Steel  Corporation  is  one  of  the  world's  wonders.  No  other 
car  distributes  a  million  a  week.  Twice  a  month  it  rolls  its 
welcome  way  through  the  shops  and  ore-yards.  The  work- 
men are  paid  while  at  work.  The  car  has  four  pay-windows. 
Inside  stand  Paymaster  W.  H.  Corbett  and  his  eight  assist- 
ants. Heaped  around  them  are  bags  of  gold,  boxes  of  silver, 
bundles  of  fifty  dollar  bills. 

"  If  a  man's  pay  is  over  fifty  dollars,  he  gets  a  bill  to  start 
with,"  said  one  of  the  pay  squad.  "  All  smaller  stuff  is  gold 
and  silver.  It  is  cleaner  and  not  so  liable  to  cause  mistakes." 

The  men  step  up  quickly — nothing  is  done  slowly  in  Pitts- 
burgh, outside  of  its  municipal  activities. 

"What's  your  name?"  snaps  the  paymaster. 

One  of  the  clerks  finds  the  name,  calls  the  amount,  checks 
it  off,  and  the  handful  of  money — orange-backed,  yellow,  and 
white — is  handed  to  the  workman.  Four  steady  rivulets  of 
money  flow  from  the  four  windows.  To  pay  out  two  mil- 
lions in  a  day  without  the  loss  of  a  nickel  is  the  work  of  an 
ordinary  pay-day.  Every  workman  in  western  Pennsylvania 

264 


PITTSBURGH 

knows  the  car.  It  is  easily  distinguished  as  it  moves  through 
the  mill-yards,  escorted  by  five  of  the  Carnegie  police.  To 
"follow  the  car"  has  become  a  regular  profession  among  the 
cripples,  beggars,  and  hand-organ  men  of  the  region.  They 
have  discovered  that  when  a  mill-worker  has  a  fistful  of  gold 
and  fifty-dollar  bills  he  is  likely  to  be  generous  with  his 
silver. 

There  are  one  hundred  and  seventy-four  banks  and  trust 
companies  in  this  smoky  Klondike.  You  will  find  thirty  of 
them  wedged  together  in  two  blocks  of  Fourth  Avenue — the 
Wall  Street  of  Pittsburgh.  Into  their  steel  vaults  are  crammed 
over  three  hundred  million  dollars  of  deposits,  and  their  total 
resources  are  not  far  from  half  a  billion.  Highest  among 
the  banks  looms  the  Mellon  National  Bank,  with  twenty-five 
million  dollars  of  deposits ;  and  towering  among  all  the  trust 
companies  is  the  Union,  with  thirty-two  million  dollars  in 
its  keeping.  Both  are  controlled  by  the  powerful  Mellon- 
Frick  alliance.  The  Union  Trust  is  the  masterpiece  of  Pitts- 
burgh finance,  with  nineteen  million  dollars  of  surplus  and 
profits,  and  stock  worth  thirty  times  its  par  value.  The 
Farmers'  Deposit  Bank,  which  was  started  in  1832  in  a  small 
back  room  by  a  few  young  Scotch-Irish  teetotalers,  now  houses 
its  twenty-two  million  dollars  in  a  magnificent  twenty-four- 
story  skyscraper. 

THE    SPREAD    OF    THE    SUBURBS 

No  map  of  this  changeful  district,  to  be  reliable,  can  be 
more  than  five  years  old.  For  fifty  miles  up  and  down  its 
rivers  young  towns  are  being  created  around  new  industries. 
The  two  latest  are  Monessen,  the  tin  city,  and  a  steel-car  city 
on  the  edge  of  Allegheny.  In  the  latter  place,  eleven  thou- 
sand workmen  roll  out  more  than  two  hundred  new  steel  cars 
every  day  as  their  contribution  to  the  wealth  of  the  world. 

265 


THE   ROMANCE   OF   STEEL 

An  unusually  swift  system  of  electric  cars  keeps  these 
smaller  communities  in  touch  with  the  centre,  and  conveys 
the  idea  to  the  average  Pittsburgher  that  his  city  is  the  hub 
of  a  vast  wheel  of  empire.  He  has  no  clear  idea  as  to  the 
precise  boundaries  of  this  empire.  Wheeling,  Youngstown, 
Newcastle,  Uniontown,  and  Connellsville  are  reckoned  to  be 
colonies  of  this  industrial  Rome.  In  fact,  several  years  ago 
Andrew  Carnegie  said  to  an  audience  of  Pittsburghers,  in  a 
flight  of  chamber-of-commerce  rhetoric:  "Pittsburgh  sits 
here,  with  one  wing  covering  the  East  and  the  other  the  West, 
her  beak  dipping  into  the  Great  Lakes  and  her  tail  flapping 
in  the  Gulf  of  Mexico."  Truly,  a  mighty  bird! 

Naturally,  Pittsburgh  feels  itself  to  be  more  than  local. 
Its  customer  is  the  whole  world.  From  a  far  Northwestern 
wilderness,  a  thousand  miles  by  land  and  lake,  comes  its  ore. 
Its  steel  rails  cross  Siberia,  connect  Alexandria  with  the  Pyra- 
mids, and  link  Joppa  with  Jerusalem.  Its  dynamos  light  up 
St.  Peter's  at  Rome,  the  mosques  of  Constantinople,  and  the 
pagodas  of  Peking.  In  time  of  war  battle-ships  are  protected 
by  its  armour-plate  and  pierced  by  its  shells.  In  every  city 
where  steel  is  bought  there  is  a  Pittsburgh  envoy — blunt, 
forceful,  and  persistent,  building  up  its  fame  and  adding  to 
its  revenues. 

What  Pittsburgh  has  done  for  American  civilisation  can 
never  be  measured.  This  was  a  twenty-mile-an-hour  country 
until  Pittsburgh  got  busy  and  furnished  us  with  cheap  steel 
for  rails  and  bridges.  Our  cities  were  little  three-story  com- 
munities until  it  gave  us  skyscrapers.  In  fact,  in  the  whole 
United  States  there  is  scarcely  a  street  or  building,  or  even 
a  furnished  room,  in  which  is  not  some  article  that  was  made 
in  Pittsburgh. 

The  great  bulk  of  its  capital  remains  at  home,  because  of 
this  extraordinary  business  activity.  It  is  called  for  by  im- 
provements and  new  undertakings,  and  falls  far  short  of  sup- 

266 


PITTSBURGH 

plying  the  demand.  At  present  the  Pittsburgh  savings-banks 
are  clamouring  loudly  for  any  number  of  millions,  and  the 
Stock  Exchange  is  kept  busy  mainly  by  the  buying  and  selling 
of  local  stocks. 

THE  SHIRT-SLEEVE  MILLIONAIRES 

Pittsburgh  has  about  one  hundred  shirt-sleeve  millionaires 
and  a  very  few  silk-hat  ones.  Without  a  single  exception, 
the  steel  kings  and  coal  barons  of  to-day  were  the  barefooted 
boys  of  yesterday.  In  this  respect  no  other  city  is  as  genuinely 
republican,  as  thoroughly  American,  as  Pittsburgh.  Its  motto 
might  be  "  From  rags  to  riches " ;  and  its  name  should  be 
spelled — Pitt$burgh.  It  is  a  region  where  even  yet  "  all  men 
are  born  free  and  equal  "  —where  the  ladder  of  opportunity 
has  rungs  that  reach  to  the  bottom.  It  is  a  land  of  money;  but 
more,  it  is  a  land  where  the  average  man  has  received  a  squarer 
deal  in  the  game  of  life  than  he  would  have  got  anywhere  else 
—where  the  prizes  are  not  bequeathed  from  strong  fathers  to 
feeble  sons,  but  carried  off  by  the  "  fittest "  in  each  contest. 

Pittsburghers  have  no  pedigree.  They  want  none.  They  are 
themselves  a  generation  of  ancestors.  The  few  aristocratic 
landowning  families  are  being  bought  out  by  the  iron  and  steel 
men.  No  "  gentlemen  "  emigrated  to  western  Pennsylvania. 
From  first  to  last  it  was  settled  by  plain,  ordinary  people,  who 
had  nothing  to  help  them  except  their  own  efforts.  Among 
the  earlier  iron  kings  not  one  had  a  college  education.  Chris- 
topher Zug  and  Curtis  G.  Hussey — two  stately  figures — were 
the  sons  of  poor  farmers.  Thomas  M.  Howe  and  Joshua 
Rhodes  were  grocery-boys.  Aaron  French  and  John  J.  Torley 
were  child  workers  in  iron-mills.  There  is  not  one  conspic- 
uous exception  to  this  rule.  The  greater  greatness  of  Greater 
Pittsburgh  is  in  the  fact  that  it  has  been  created  by  the  rank 
and  file  of  the  human  race.  It  is  the  extraordinary  achieve- 
ment of  ordinary  men. 

267 


THE  ROMANCE   OF   STEEL 

Until  twenty  years  ago,  the  bulk  of  the  Pittsburghers  were 
Scottish-Irish,  English,  and  Welsh.  To-day  there  are  in  Pitts- 
burgh and  Allegheny  about  eighty  thousand  Germans,  forty 
thousand  Italians,  fifty-five  thousand  Poles,  thirty-five  thou- 
sand Huns  and  Slavs,  fifteen  thousand  Jews,  two  thousand 
Greeks,  and  two  thousand  Assyrians,  besides  a  number  of  ne- 
groes. You  may  hear  thirty  languages  on  the  streets.  Out  of 
every  nine  inhabitants,  four  are  foreign-born.  So  it  is  a  com- 
munity with  little  national  prejudice.  If  a  man  is  efficient, 
it  makes  little  difference  whether  or  not  he  speaks  broken 
English,  or  uses  bad  grammar,  or  wears  torn  clothes  and  a 
soiled  collar.  Under  such  a  smoke-cloud  no  one  can  be  clean. 
In  such  a  labyrinth  of  workshops  no  one  can  be  a  dandy.  And 
among  so  many  dialects  every  man  sees  the  folly  of  claiming 
superiority  for  his  own. 

AN  INCONSPICUOUS  MONEY-MAKER 

In  Pittsburgh,  all  that  is  gold  does  not  glitter.  The  thick- 
jawed  workman  who  sits  beside  you  in  the  street-car  may  be 
the  chief  of  five  thousand  men.  In  business  hours,  at  least, 
it  is  difficult  to  tell  the  average  millionaire  from  his  janitor. 
It  is  said  that  once  upon  a  time  one  of  these  ordinary-looking 
Titans  of  industry  entered  a  New  York  jewellery  store.  The 
clerks  first  ignored  him,  supposing  him  to  be  a  rural  sightseer. 
When  he  asked  to  see  some  silver  plate  he  was  turned  over 
to  a  young  salesman,  who  indifferently  pointed  out  some  of 
the  cheapest  goods. 

"  Show  me  your  best,"  said  the  rough-looking  old  man. 

The  cynical  clerk  placed  before  him  several  pieces  of  the 
most  artistic  silverware  that  the  hand  of  a  silversmith  can 
fashion,  and  then  smote  him  with  the  price,  expecting  it  to 
be  a  finishing  blow.  "  This  is  twenty-seven  hundred  dollars," 
he  said.  "  This  is  thirty-five  hundred  dollars,  and  that  is  five 
thousand  dollars." 

268 


PITTSBURGH 

"  I'll  take  them  all,"  quietly  said  the  ungloved,  unshaven 
customer.  "  Now  show  me  some  larger  pieces." 

The  clerk  gasped,  then  deferentially  brought  to  notice  the 
finest  treasures  of  the  show-case.  The  old  Pittsburgher  added 
piece  to  piece,  until  his  bill  was  sixty-five  thousand  dollars. 
Writing  out  a  check  for  the  full  amount,  he  handed  it,  with  his 
address,  to  the  astonished  salesman,  walked  out  of  the  store, 
and — hailed  a  street-car. 

"  Is  this  check  all  right?  "  asked  the  clerk  of  the  cashier. 

"All  right?"  exclaimed  the  cashier.  "Why,  that's  Lock- 
hart,  of  Pittsburgh!  His  signature  would  be  good  in  this  store 
for  fifty  million  dollars." 

Still  more  recently  one  of  Pittsburgh's  inconspicuous  mil- 
lionaires of  steel  was  arrested  at  night  outside  his  own  door 
by  a  policeman  who  mistook  him  for  a  burglar.  In  spite  of 
his  threats  and  protests,  he  was  thrown  into  a  cell  with  two 
common  drunks  and  left  unidentified  until  morning.  Several 
of  Pittsburgh's  wealthiest  men  have  not  grown  out  of  the 
frugal  habits  which  they  formed  in  previous  days  of  poverty. 
Of  one — a  bank  president — it  is  said  that  his  usual  meal  at 
noon  consists  of  a  five-cent  glass  of  beer  and  the  cheese  and 
pretzels  of  the  free-lunch  counter. 

But  in  the  last  half  dozen  years  Pittsburgh  has  become  more 
than  a  workshop.  It  is  now  in  process  of  growing  into  a  real 
city,  with  homes  instead  of  shelters,  avenues  instead  of  roads, 
and  air  instead  of  smoke.  At  present,  enough  of  the  Old  re- 
mains to  contrast  strikingly  with  the  new.  It  is  a  city  of 
heavens  and  hells,  of  green  hills  and  smudgy  valleys,  magnifi- 
cent parks  and  narrow  alleys,  resplendent  palaces  and  grimy 
hovels.  The  business  section,  crammed  and  glutted  with 
wealth,  is  still  hedged  in  by  slums  where  the  struggle  of  trade 
is  for  pennies.  For  the  student  of  social  conditions,  Pitts- 
burgh is  an  impressive  study  in  black  and  white. 

269, 


THE   ROMANCE   OF   STEEL 

IN   DEFENCE   OF   SMOKE 

The  wealthy  Pittsburgher  has  developed  to  the  point  where 
he  demands  every  possible  luxury  for  his  home,  but  as  yet  he 
has  no  wish  to  spend  his  business  hours  in  cleanly  and  beau- 
tiful surroundings.  He  is  even  somewhat  boastful  of  the 
smoke. 

"  Smoke  means  business,"  he  says  complacently,  taking  a 
cinder  out  of  his  eye.  Narrow,  badly  paved  streets  run  in 
front  of  banks  that  are  bursting  with  the  wealth  of  kings.  The 
millionaire  Pittsburgher  makes  no  protest.  He  does  not  even 
think  of  any  as  he  splashes  through  the  mud-holes.  If  his 
streets  were  ladders  he  would  run  up  and  down  without  a 
murmur.  He  is  busy.  As  long  as  he  is  picking  up  millions, 
what  matters  if  he  finds  them  in  the  dirt? 

Industrial  and  financial  Pittsburgh  has  no  trees,  no  parks, 
no  statues,  no  fountains.  Its  only  work  of  art  is  the  superb 
stained-glass  window  in  the  main  entrance  of  the  Frick  Build- 
ing. In  the  arid  yards  of  the  furnaces  and  steel  mills  there 
is  no  room  for  a  blade  of  grass.  And  in  the  dingy  labourer's 
cottages  there  are  a  hundred  thousand  bedraggled  women, 
fighting  a  desperate  but  hopeless  battle  against  dirt  and  smoke. 
Truly,  to  paraphrase  Kipling,  if  work  and  murk  be  the  price 
of  millions,  Pittsburgh  has  paid  it  in  full. 

The  city  has  always  its  pillar  of  cloud  by  day  and  pillar  of 
fire  by  night.  A  yellow  haze  hangs  over  the  region,  as  though 
reflecting  the  gold-making  that  is  going  on  below.  Floating 
rivers  of  dense  black  smoke  flow  from  hundreds  of  chimneys 
and  flood  the  streets  between  the  skyscrapers.  At  night  the 
scene  is  one  of  lurid  grandeur — a  continuous  fire  festival. 
Looking  from  one  of  the  cliffs  that  tower  over  the  city,  it 
seems  as  though  a  miniature  sky,  inverted,  lay  below,  with  here 
and  there  the  blaze  of  a  comet  or  the  flash  of  a  meteor. 

Until  1898,   Pittsburgh  had  practically  no  stock  exchange. 

270 


HOMER    J.    LINDSAY 


PITTSBURGH 

There  was  an  idle  group  of  a  hundred  brokers,  who  had  paid 
a  hundred  dollars  apiece  for  their  seats.  They  had  no  build- 
ing, and  little  business.  Then  the  launching  of  three  local 
stocks — a  street-railway  merger,  Crucible  Steel,  and  Westing- 
house  Air-Brake — boomed  the  sale  of  stocks  up  to  two  million 
six  hundred  and  fourteen  thousand  shares  a  year.  About  the 
same  number  were  sold  in  1899,  and  in  1900  the  sales  were 
nearly  doubled.  In  the  notable  year  of  1901  the  Steel  Trust 
excitement  sent  the  sales  up  to  almost  five  and  a  half  millions. 

The  stock  exchange  took  in  thirty  new  members,  at  ten 
thousand  dollars  apiece,  and  used  the  three  hundred  thousand 
dollars  in  the  erection  of  a  handsome  building  in  the  heart  of 
the  banking  district.  Strangely  enough,  it  stands  on  the  exact 
spot  where  the  local  branch  of  the  United  States  Bank  once 
stood,  before  it  was  struck  by  the  lightning  of  Andrew  Jack- 
son's anger. 

It  is  said  that  "  shoemakers'  children  are  worst  shod,"  and 
this  proverb  may  well  be  applied  to  Pittsburgh  in  the  matter 
of  iron  and  steel.  For  years  after  the  skyscraper  age  had 
begun  in  Chicago  and  New  York  there  were  no  high  build- 
ings breaking  the  sky-line  in  any  part  of  western  Pennsylvania. 
The  Carnegie  Building  was  the  first  tall  steel-frame  building 
in  Pittsburgh.  It  was  more  than  a  nine  days'  wonder.  Every 
one  regarded  it  with  the  keenest  curiosity.  Public  opinion 
finally  agreed  that  it  was  being  erected  as  an  advertisement 
of  the  Carnegie  Steel  Company — a  freakish  notion  from  the 
brain  of  the  "  flighty  "  little  Scotsman.  The  steel  for  a  thou- 
sand lake  and  ocean  steamships  was  made  in  Pittsburgh;  yet 
the  boats  upon  its  own  rivers  are  of  the  old-fashioned,  wooden, 
stern-wheel  type — necessarily  so,  say  the  river  men,  because 
of  the  shallowness  of  the  rivers.  Pittsburgh  stands  ready  to 
furnish  to  other  cities  floating  docks  of  steel,  but  along  its  own 
water-front  there  are  practically  no  docks  at  all — nothing  but 
anchored  barges  of  wood.  In  nothing  but  the  one  item  of 

271 


THE   ROMANCE   OF   STEEL 

bridges  is  Pittsburgh  more  opulent  in  the  uses  of  iron  and 
steel  than  other  cities  of  equal  size. 


PITTSBURGH  AND  THE  RAILROADS 

"  The  weakest  link  in  Pittsburgh's  greatness  is  the  rail- 
road," said  Willis  L.  King,  one  of  its  steel  millionaires.  The 
Pennsylvania  Railroad  may  be  said  to  be  its  best  friend  and 
also  its  worst  enemy.  Pittsburgh  can  neither  get  along  with 
it  nor  without  it.  For  over  fifty  years — ever  since  the  first 
engine  that  crawled  across  the  Alleghenies  was  welcomed  with 
joy — there  has  been  a  bitter  war  between  the  railroad  cor- 
poration and  the  citizens. 

When  the  Carnegie  family  travelled  along,  inch  by  inch, 
from  New  York  to  Pittsburgh,  in  1848,  it  was  a  two  weeks' 
journey,  by  way  of  Buffalo  and  Lake  Erie.  To-day  it  takes 
nine  hours.  Passengers  fall  asleep  in  the  one  city  and  awake 
in  the  other.  But  there  has  never  been  a  time,  either  in  the 
earlier  or  in  the  later  days,  when  Pittsburgh  was  satisfied  with 
its  transportation  facilities.  It  fought  with  the  waggoners  in 
1820  until  they  cut  the  trip  to  Philadelphia  from  twenty-five 
to  fifteen  days.  It  hurrahed  for  the  canal  that  was  finished  in 
1829,  and  soon  afterward  called  it  "the  old  State  robber," 
and  waged  war  on  the  officialdom  that  mismanaged  it.  And 
although  the  railroads  have  been  spending  money  like  water 
to  satisfy  the  city's  demands,  they  find  themselves  unable  to 
silence  the  call  for  more  cars  and  lower  rates. 

There  is  room  in  the  Pittsburgh  railroad  yards  for  sixty 
thousand  cars.  There  is  a  one-hundred-mile  belt  line  around 
the  manufacturing  region.  The  tracks  in  the  yards  would 
reach  from  New  York  to  Buffalo.  Of  passenger-trains,  there 
are  a  thousand  in  and  out  of  Pittsburgh  every  week-day.  In 
the  last  six  years  four  railroads  have  paid  out  in  Pittsburgh, 
for  all  purposes,  more  than  a  quarter  of  a  billion  dollars. 

272 


H.    B.    BOPE 


Of  THE 

UNIVERSITY 

OF 


PITTSBURGH 

George  Gould  has  lately  spent  twenty-five  million  dollars  to 
give  the  district  a  competing  line  to  the  West,  and  is  spending 
an  equal  amount  for  spurs  and  terminals.  He  is  also  about 
to  give  it  a  short  line  to  the  sea,  making  Baltimore  its  seaport. 
Yet  the  insatiable  Pittsburghers  cry  for  more.  If  they  were 
makers  of  jewellery  or  watch-springs,  the  item  of  transporta- 
tion would  be  insignificant.  But  as  they  are  sellers  of  the 
heaviest  and  bulkiest  of  commodities,  the  question  of  cheap 
freightage  is  a  "  paramount  issue." 

THE    PROBLEM    OF    WATERWAYS 

At  present  the  river  traffic  consists  mainly  of  coal-barges. 
A  single  steamer  has  been  known  to  guide  fifty  barges  to  New 
Orleans,  every  barge  loaded  with  a  thousand  tons.  For  a  boat 
of  any  size  the  Ohio  River  is  not  navigable  up  to  Pittsburgh 
for  more  than  one-fifth  of  the  year.  Consequently,  two  big 
waterway  projects  have  recently  been  launched — a  ship-canal 
north  to  Erie  and  the  canalisation  of  the  Ohio  River  south  to 
Cairo.  The  latter  project  has  been  taken  in  hand  by  Congress, 
and  a  Congressional  committee  has  been  escorted  along  the 
thousand-mile  route  by  enthusiastic  Pittsburghers,  welcomed 
at  every  stop  by  the  screeching  of  whistles  and  the  cheering  of 
swarthy  workmen. 

Pittsburgh  has  done  little  for  itself  in  the  improvement  of 
its  rivers.  It  has  lacked  the  civic  enterprise  to  do  for  the 
Ohio  what  Glasgow  did  for  the  Clyde.  Within  recent  years 
it  has  not  spent  more  than  one  dollar  on  its  rivers  for  every 
one  thousand  five  hundred  dollars  spent  there  by  the  nation. 
In  such  matters  of  social  self-help  it  is  still  a  novice. 

But  the  city  that  has  mastered  the  problem  of  production  in 
so  short  a  time  will  not,  in  the  end,  be  balked  by  the  difficulty 
of  transportation.  By  the  time  the  boys  who  are  now  in  its 
public  schools  become  citizens,  Pittsburgh  hopes  to  be  send- 

273 


THE   ROMANCE   OF   STEEL 

ing  its  steel  rails  and  beams  and  billets  to  San  Francisco  with- 
out unloading,  by  way  of  the  Ohio  River  and  the  Panama 
Canal;  and  to  the  ports  of  Europe,  by  way  of  canal  to  Lake 
Erie.  To-day  almost  every  manufacturing  site  along  the  Ohio 
for  a  hundred  miles  below  Pittsburgh  has  been  secured,  and  it 
is  probable  that  before  twenty  years  have  passed  the  river  will 
be  fenced  with  smoking  workshops,  with  Pittsburgh  at  one 
end  and  Wheeling  at  the  other.  The  era  of  steamboating  will 
begin  again,  with  more  than  the  glory  of  ante-bellum  days. 


THE    PALACES    IN    THE    SUBURBS 

Suburban  Pittsburgh — a  region  little  known  to  outsiders — 
is  a  chaos  of  magnificence.  Its  mansions  are  veritable  muse- 
ums of  all  that  is  costly  and  unique.  The  art  stores  of  New 
York,  Paris,  London,  Vienna,  and  Berlin  have  been  ransacked 
to  furnish  them.  Many  of  the  masterpieces  of  European 
artists  hang  on  their  walls.  Liveried  servitors,  silent  and 
automatic,  wait  for  orders.  All  that  money  can  buy  is  in  the 
palaces  of  these  men  who,  with  scarcely  an  exception,  were 
born  and  reared  in  the  three-roomed  cottages  of  the  poor.  Mr. 
Carnegie's  phrase,  "  Triumphant  Democracy,"  has  a  very 
definite  and  vivid  meaning  to  those  who  drive  from  end  to 
end  of  Highland  Avenue  or  reconnoiter  the  aristocratic  fast- 
nesses of  Sewickley. 

Best  of  all,  these  palaces  are  also  homes,  witH  very  few 
exceptions.  These  iron  and  steel  barons  married  for  love. 
Not  one  married  a  fortune.  With  Mr.  Carnegie  as  the  one 
exception,  they  married  in  the  days  of  their  poverty — when 
they  had  nothing  to  offer  but  ambition  and  affection.  William 
E.  Corey,  president  of  the  United  States  Steel  Corporation, 
and  Julian  Kennedy,  Pittsburgh's  most  eminent  engineer,  both 
married  schoolmates.  H.  C.  Frick  and  Thomas  M.  Carnegie 
selected  the  daughters  of  iron-makers.  Henry  W.  Oliver,  who 

274 


W.     H,    SINGER 


OF  TH  - 

UNIVERSITY 

OF 


PITTSBURGH 

left  over  forty  millions  to  his  widow,  married  her  in  her 
father's  house — a  dingy  little  wooden  cottage.  A.  R.  Pea- 
cock, J.  G.  A.  Leishman,  and  W.  L.  Abbott  were  clerks  when 
they  were  married;  Homer  J.  Lindsay  and  Henry  P.  Bope 
were  stenographers ;  F.  T.  F.  Lovejoy  and  W.  C.  McCausland 
were  bookkeepers ;  and  A.  R.  Hunt  was  a  roller. 

Highest  of  all  the  Pittsburgh  heavens  is  Sewickley  Heights. 
Twelve  miles  down  the  Ohio  River  lies  the  select  village  of 
Sewickley,  in  which  all  vulgar  street-cars  are  forbidden ;  and 
along  the  high  slope  behind  it,  looking  as  though  they  were 
the  boxes  of  a  vast  opera-house,  stands  an  array  of  stately 
homes.  All  are  built  after  the  fashion  of  baronial  castles,  with 
imposing  entrances  and  winding  roadways  from  gate  to  house. 
Fortunes  have  been  spent  in  landscape  gardening,  some  of 
the  designs  being  "  fearfully  and  wonderfully  made."  Hills 
have  been  hollowed  into  valleys,  and  valleys  have  been  heaped 
into  hills.  Most  of  the  owners  of  this  smokeless,  slumless 
Eden  are  steel  millionaires.  It  was  founded  by  the  late  B.  F. 
Jones,  who  built,  not  only  a  mansion  for  himself,  but  also  one 
apiece  for  his  three  daughters.  To-day,  among  his  neighbours 
are  Mrs.  Henry  W.  Oliver,  W.  H.  Singer,  Mr.  Scaife,  and 
Mr.  Snyder — all  owners  of  iron  and  steel  fortunes. 

Three  titled  foreigners — two  counts  and  an  earl — have  cap- 
tured Pittsburgh  heiresses  and  become  the  city's  most  distin- 
guished social  curios.  Another  ten-million-dollar  heiress 
supplied  it  with  a  romance  last  year  by  rejecting  an  Italian 
count  and  marrying  a  fortuneless  lawyer  who  had  been  her 
sweetheart  ever  since  their  childhood  days.  The  young  heiress 
had  been  engaged  to  the  count,  but  when  arrangements  were 
begun  for  the  marriage  he  destroyed  its  poetry  by  demanding 
that  all  his  debts  be  paid,  and  that  he  receive  fifty  thousand 
dollars  cash  down  and  an  income  of  ten  thousand  dollars  a 
year.  The  indignant  young  lady,  being  an  energetic  Pitts- 
burgher,  at  once  turned  him  adrift  and  selected  a  bridegroom 

275 


THE   ROMANCE   OF   STEEL 

who  loved  her  for  herself  alone.  The  international  marriage 
which  has  probably  pleased  Pittsburgh  most  was  that  of  Sir 
George  Howard  Darwin,  eldest  son  of  Charles  Darwin,  to 
Miss  Du  Puy,  whose  father  was  a  steel-maker  of  the  pre- 
Carnegian  period. 

INDUSTRY    AND    ART    IN    PITTSBURGH 

In  the  matter  of  art  and  letters,  Pittsburgh  has  little  to  offer. 
It  is  too  young,  too  busy,  too  breathless.  It  buys  books,  but 
does  not  write  them;  pictures,  but  does  not  paint  them;  music, 
but  does  not  compose  it.  Its  appreciation  of  art  and  literature 
at  present  is  mainly  in  the  sense  of  ownership — nothing  more. 
To  expect  Pittsburghers  to  be  artistic  is  to  expect  too  much. 
As  well  might  we  censure  a  locomotive  because  it  cannot 
climb  a  tree.  The  Pittsburgh  mind  interprets  everything  in 
terms  of  tonnage  and  production.  One  of  the  steel  kings,  for 
instance,  was  recently  talking  of  the  weird  light,  like  the 
Alpine  glow,  that  is  seen  in  the  Pittsburgh  sky  at  night. 

"  Yes,  sir,  it's  fine,"  said  he.  "  No  artist  can  paint  it.  They 
have  often  tried,  but  they  fail  every  time.  Why,  they  don't 
even  know  the  chemistry  of  it!  " 

Pittsburgh  has  had  one  great  song-writer — Stephen  C. 
Foster,  author  of  "  Old  Folks  at  Home  "  —and  one  poet- 
Richard  Realf.  It  has  secured  such  eminent  musicians  as 
Victor  Herbert,  Emil  Paur,  and  the  late  Frederic  Archer. 
So  far  as  education  is  concerned,  it  is  the  land  of  the  public 
school.  Its  one  large  institution — the  Western  University,  has 
barely  a  thousand  students,  and  has  never  been  supported  as  it 
deserves  to  be.  The  average  Pittsburgher  has  been  self-taught 
and  self-trained.  He  owes  little  or  nothing  to  the  halls  of 
learning.  Mr.  Carnegie  has  recently  done  his  best  to  remedy 
this  defect  in  technical  training  by  building  an  immense  group 
of  schools  which  will  cost  ten  millions  at  least,  and  "  as  much 
more  as  they  need,"  he  says,  "  to  make  them  the  best  in  the 
world." 

276 


ALEXANDER    R.    PEACOCK 


PITTSBURGH 

POLITICAL  PITTSBURGH 

In  the  management  of  its  public  affairs,  Pittsburgh  has  been 
a  failure.  The  men  of  steel  have  been  merely  men  of  clay  in 
the  hands  of  the  bosses.  From  richest  to  poorest,  there  has 
been  little  or  no  public  spirit.  Every  one  is  for  himself,  and 
no  one  is  for  the  city,  with  a  few  heroic  exceptions.  Two  of 
the  richest  citizens  died  within  the  last  few  years  and  left  not 
a  dollar  to  the  city  in  which  they  had  accumulated  from  forty 
to  fifty  million  dollars  apiece.  Of  the  twenty-five  steel  bridges 
that  cross  its  rivers,  the  city  owns  four,  and  pays  toll  to  go 
over  the  rest.  Its  street-car  company,  capitalised  at  eighty- 
four  million  dollars  and  earning  a  gross  income  of  eight 
million  dollars,  grudgingly  pays  a  tax  of  twenty  thousand 
dollars  a  year  on  its  cars.  The  company  secured  a  charter 
good  for  a  thousand  years,  and  might  have  obtained  it  just  as 
easily  had  it  been  drawn  for  all  eternity.  Half  a  billion  flows 
into  Pittsburgh's  private  purses  every  year,  yet  as  a  city  it  is 
fourteen  million  dollars  in  debt.  Its  workmen  fill  ten  thou- 
sand freight  cars  a  day,  yet  it  lives  from  hand  to  mouth,  as 
though  it  were  a  settlement  of  South  Sea  Islanders. 

To-day  Pittsburgh  is  content,  for  two  reasons :  first,  because 
political  conditions  are  much  better  than  formerly;  and, 
second,  because  the  philanthropy  of  a  few  individuals  has  pro- 
vided some  of  those  civic  necessities  which  its  public  officials 
failed  to  supply.  Mrs.  Schenley  has  given  a  park;  Henry 
Phipps  has  given  conservatories;  and  Andrew  Carnegie  is 
lavishing  twenty-five  millions  or  more  upon  libraries,  tech- 
nical schools,  an  art  gallery,  and  a  museum.  Twelve  years 
ago  there  were  poorer  buildings,  muddier  streets,  and  blacker 
smoke-clouds.  Forty  years  ago  there  was  a  boss  whose  custom 
it  was  to  shoot,  horsewhip,  or  blind  with  red  pepper  any  min- 
ions of  the  law  who  opposed  him.  Therefore,  the  boss  rule 
of  to-day  seems  to  the  average  citizen  to  be  gentle  and  en- 
lightened compared  with  what  his  father  endured. 

277 


THE  ROMANCE   OF   STEEL 

But  in  many  ways  there  is  coming  a  Higher  Pittsburgh,  as 
well  as  a  Greater.  The  hot-blast  of  good  citizenship  has  never 
been  as  strong  as  it  is  to-day,  and  political  life  is  slowly  but 
surely  being  refined.  The  Chamber  of  Commerce  is  showing 
the  value  of  team-play  in  civic  matters.  Moral  standards  are 
being  raised.  In  short,  Pittsburgh  is  ripe  and  ready  for  leader- 
ship along  higher  lines.  Let  the  right  man  appear — a  man  of 
intellectual  and  spiritual  force — and  he  will  find  a  rank  and 
file  well  worthy  of  his  genius. 

THE   BEGINNINGS   OF    PITTSBURGH 

Pittsburgh  had  a  late  start  in  the  iron  trade.  The  Lynn 
iron-workers  were  making  pots,  sickles,  and  fire-engines  for 
a  century  before  the  Pittsburgh  region  was  discovered.  Celo- 
ron  de  Bienville  was  the  first  white  man  on  the  spot.  In  1749 
he  took  possession  of  the  district  in  the  name  of  the  French 
king.  To  prove  his  claim,  he  nailed  to  a  tree  a  sheet-iron 
plate  bearing  the  royal  fleur-de-lis. 

"  It  is  the  most  beautiful  village  I  have  seen,"  he  writes— 
a  description  which  will  seem  incredible  to  Pittsburghers. 
Where  to-day  the  twelfth  ward  of  the  murky  city  stands  there 
was  then  a  cluster  of  Indian  wigwams  under  the  trees.  "  Shan- 
nopin's  Town,"  as  it  was  called,  was  noted  among  the  Indians 
for  its  picturesque  beauty.  When  Bienville  found  it,  it  was 
ruled  by  a  vigorous  old  squaw  named  Aliquippa. 

Four  years  afterward,  a  young  officer  in  the  British  service 
— Adjutant  George  Washington — was  sent  to  make  investiga- 
tions around  Shannopin's  Town.  He  was  tactful  enough  to 
gain  the  friendship  of  Queen  Aliquippa  by  presenting  her 
with  a  bottle  of  whisky;  but  he  had  several  hairbreadth 
escapes  dodging  the  French  and  the  hostile  Indians.  An  old 
Scotch  blacksmith,  John  Frazier,  who  had  become  popular 
among  the  Indians  by  mending  their  guns,  took  a  fancy  to  the 
young  adjutant  and  pulled  him  out  of  two  or  three  scrapes. 

278 


WILLIAM    L.    ABBOTT 


PITTSBURGH 

No  spot  in  America  is  richer  in  historic  associations  than 
the  Pittsburgh  region.  It  was  here  that  Washington  began 
his  career.  The  first  important  action  of  the  French  and 
Indian  War  was  fought  at  Pittsburgh,  then  known  as  Fort 
Duquesne.  It  was  here,  where  now  the  blast-furnaces  and 
rolling-mills  are  massed  most  thickly,  that  General  Braddock 
was  defeated  in  1755.  That  battle  first  suggested  to  the  mind 
of  Washington  the  superiority  of  colonial  troops  over  the 
wrongly  drilled  British  regulars. 

When  visiting  the  Krupp  iron  and  steel  works  in  Germany 
—an  immense  plant  that  gives  employment  to  forty-eight 
thousand  men — the  writer  was  shown  a  tiny  wooden  cabin, 
strangely  located  in  the  centre  of  one  of  the  great  machine- 
shops.  In  this  little  house  the  original  Krupp  lived  for  years 
and  ate  the  black  bread  of  poverty,  until  his  genius  as  a 
steel-maker  was  recognised  and  rewarded.  It  was  his  wish 
that  the  little  cabin  should  be  preserved,  as  a  perpetual  re- 
minder of  his  early  struggles.  "  May  this  memorial  prevent 
us  from  despising  small  things  and  preserve  us  from  vanity," 
he  wrote  above  the  door-post. 

And  Pittsburgh  preserves  a  similar  memento  of  its  earlier 
days — the  little  blockhouse  which  was  built  as  a  refuge  from 
the  Indians.  Overtopped  by  skyscrapers,  girt  about  by  street- 
car lines,  and  smudged  by  the  smoke  of  a  hundred  furnaces 
and  rolling-mills,  the  sturdy  little  fort  remains  to  remind 
the  city  of  its  babyhood. 

WHISKY    FIRST    BOOMED    PITTSBURGH 

It  was  not  iron  that  first  boomed  Pittsburgh.  It  was 
whisky.  For  a  generation  after  the  British  had  driven  out 
the  French,  Pittsburgh  remained  a  frontier  trading-post — 
nothing  more.  A  little  handful  of  Scottish  and  Irish  settlers 
made  a  poor  living  by  swapping  liquor  for  furs  with  the 

279 


THE   ROMANCE   OF   STEEL 

Indians.  There  were  three  ironsmiths  in  the  village — 
Thomas  Wylie,  who  made  edge-tools  "  of  all  kinds";  Wil- 
liam Dunning,  who  turned  out  scythes  and  sickles,  and 
George  McGunnegle,  who  proclaimed  himself  a  maker  of 
scalping-knives  and  tomahawks.  It  was  noted  for  "  all  sorts 
of  wickedness."  Even  after  it  had  grown  large  enough  to 
have  four  lawyers  it  had  no  church  and  no  preacher.  '  This 
place  will  never  be  very  considerable,"  said  a  writer  of  that 
time. 

Then  came  the  Whisky  Rebellion.  Thousands  of  settlers 
in  western  Pennsylvania  refused  to  pay  the  Federal  tax  of 
seven  cents  a  gallon  on  whisky,  defied  the  local  authorities, 
raised  a  seven-star  flag,  and  threatened  secession.  Whisky 
was  at  that  time  an  article  of  universal  use.  It  was  often 
employed  as  money,  a  gallon  being  valued  at  a  shilling.  The 
tax,  therefore,  was  regarded  as  an  intolerable  oppression,  and 
for  a  time  the  "  whisky  boys  "  carried  everything  before  them. 

President  Washington  foresaw  the  danger  to  the  Union. 
He  called  for  thirteen  thousand  soldiers,  got  them,  and  rushed 
them  to  Pittsburgh.  At  once  the  rioters  put  away  their  guns, 
the  leaders  fled ;  and  law  and  order  won  a  bloodless  victory. 

When  the  army  was  disbanded  many  of  the  soldiers  re- 
mained in  Pittsburgh,  and  so  transformed  the  village  into  a 
town.  The  rebellion  had  called  general  attention  to  Pitts- 
burgh, the  army  had  beaten  a  road  across  the  mountains,  and 
from  this  time  the  community  began  to  grow  and  prosper. 

If  we  may  believe  the  fervid  description  of  its  residents, 
it  was  still  a  place  of  beauty.  "This  is  one  of  the  most 
beautiful  regions  in  the  world,"  wrote  H.  M.  Brackenridge, 
one  of  its  lawyers.  "  It  resembles  the  Vale  of  Cashmere— 
the  Garden  of  Eden — or  Paradise  itself.  Here  there  is  the 
prospect  of  extensive  hills  and  dales,  whence  the  fragrant 
air  brings  odours  of  a  thousand  flowers  and  plants  upon  its 
balmy  wings." 

280 


PITTSBURGH 

Two  crystal  springs  bubbled  up  where  the  Frick  Building 
now  stands  and  rippled  down  through  flowery  fields  to  the 
river.  A  bower  of  green  shrubs  was  built  here,  and  on  moon- 
lit evenings  the  young  people  gathered  to  sing  and  dance  and 
woo.  There  was  no  smoke,  no  steel,  no  skyscraper,  no  bil- 
lion-dollar trust. 

But  whatever  its  natural  beauties  may  have  been,  Pittsburgh 
was  by  no  means  a  paradise.  It  could  scarcely  be  called  a 
civilised  community  a  century  ago.  Only  the  most  reckless 
and  daring  men  in  the  colonies  would  venture  so  far  into  the 
perilous  western  wilderness.  The  town  resembled  a  mining- 
camp  much  more  than  an  organised  settlement.  Although 
the  land  had  been  bought  from  the  Indians  for  ten  thousand 
dollars  and  a  barrel  of  whisky,  there  were  still  as  many  In- 
dians as  white  men  in  the  muddy  streets. 

Law  was  whatever  the  wrath  of  the  citizens  demanded. 
For  mild  offences — laziness,  cowardice,  slander,  and  so  forth 
- — the  offender  was  "hated  out"  of  the  town.  For  serious 
offences — theft,  wife-beating,  or  cheating  at  cards — he  was 
fined,  whipped,  seated  in  the  stocks,  put  in  the  pillory, 
branded,  or  deprived  of  his  ears.  Prisoners  were  jailed  be- 
fore trial,  not  after,  as  the  jail  was  a  small  one-roomed  log 
cabin,  often  packed  like  a  bait-can  with  negroes,  Indians,  and 
whites — men  and  women. 


THE    SPORTS   OF    FORMER   DAYS 

The  favourite  outdoor  sport  was  horse-racing;  the  favour- 
ite indoor  game  was  billiards.  The  day  of  the  races  was  a 
general  festival.  All  work  was  stopped.  Dozens  of  booths 
were  built  around  the  race-track.  Indians  and  whites,  par- 
ents and  children,  horses  and  dogs,  were  all  alike  in  a  passion 
of  excitement.  Between  the  races  old  fiddlers  rasped  to 
groups  of  dancers,  and  sharpers  played  card  tricks  for  the 

281 


THE  ROMANCE   OF   STEEL 

experience  of  newcomers.     Dennis  Loughy,  the  blind  poet, 
was  always  to  be  heard  hoarsely  chanting  his  famous  epic: 

Come,  jintlemen,  jintlemen,  all, 

Gin'ral  Sinclair  shall  raymimbered  be; 

For  he  lost  thirteen  thousand  min  all, 
In  the  Western  Tari-to-ree. 

Such  was  the  childhood  of  Pittsburgh.  The  first  discovery 
of  iron  ore  was  recorded  in  1780  by  a  surveyor  named  Col- 
onel William  Crawford,  who  was  burned  at  the  stake  two 
years  later  by  the  Indians  of  Sandusky.  Coal  was  found  in 
1784,  on  top  of  the  high  cliff  opposite  the  blockhouse.  The 
mine-owner,  who  was  also  the  miner,  tied  up  the  coal  in  raw- 
hides, half  a  bushel  in  a  package,  rolled  it  down  the  cliff,  and 
paddled  it  across  the  river  in  his  canoe. 

The  first  iron-makers  had  no  machinery  worthy  of  the 
name.  The  famous  tilt-hammer,  which  was  regarded  as  a 
wondrous  labour-saving  device,  was  so  simple  that  the  mind 
of  a  Siberian  Koriak  might  have  produced  it.  It  was  nothing 
more  than  a  long-handled  fifty-pound  hammer  balanced  on  a 
post  in  such  a  way  that  it  teetered  up  and  down  with  the 
movement  of  a  water-wheel.  A  few  enterprising  ironmasters 
increased  the  weight  of  the  hammer-head,  and  when  at  last 
a  four-hundred-pound  hammer  was  put  in  place,  operated 
by  a  monster  water-wheel,  it  was  regarded  as  the  eighth  won- 
der of  the  world.  If  it  were  possible  to  restore  to  life  the 
proud  possessor  of  that  "mighty"  tilt-hammer,  and  to  place 
him  beside  the  huge  hydraulic  press  in  the  Bethlehem  armour- 
plate  shop,  which  exerts  a  pressure  of  fourteen  thousand 
tons,  it  would  doubtless  be  impossible  to  convince  him  that 
he  was  once  more  upon  the  earth,  and  not  upon  some  lordlier 
planet. 

\  "  Everybody  drank  whisky  in  those  pioneer  times,"  says 
Father  A.  A.  Lambing,  one  of  Pittsburgh's  historians. 
."  There  was  better  whisky  then  for  thirty-five  cents  a  gallon 


PITTSBURGH 

than  you  can  buy  now  for  five  dollars.  Many  a-  time,  when 
I  was  a  boy,  have  I  been  sent  to  the  grocery  store  to  trade  a 
hatful  of  eggs  for  a  half  gallon  of  whisky  for  the  men  in  the 
iron-works." 

The  hammerman,  or  "  shingler,"  was  the  king  bee  of  the 
forge.  When  he  was  drunk,  the  others  had  to  quit  work, 
which  caused  endless  quarrelling.  Squabbles  and  fist-fights 
were  all  in  the  day's  work.  Almost  every  improvement 
brought  on  a  strike.  When  the  hot  blast  was  first  used,  the 
puddlers  rebelled,  claiming  that  it  made  the  iron  harder  to 
work.  When  "  squeezers "  were  invented,  they  tried  to  break 
the  machinery.  They  balked  at  every  step  of  progress  made 
in  the  rolling-mill,  and  mutinied  constantly  against  the 
pioneer  steel-makers. 

Both  masters  and  men  were  superstitious.  For  centuries 
the  development  of  steel-making  was  blocked  by  the  general 
belief  that  some  magic  fluid  was  necessary  to  the  making  of 
good  steel.  "  The  mystery  lies  in  the  liquor  they  quench  it 
in,"  said  Colonel  William  Byrd  in  1732.  Numerous  quacks 
had  pills  and  "salts"  for  sale,  guaranteed  to  transform  pig 
iron  into  the  best  Damascus  steel.  One  of  these  "  steel  doc- 
tors" was  loud  in  the  recommendation  of  raw  potatoes  for 
the  refinement  of  iron.  Others  added  soot,  or  leather,  or 
burned  horse-hoof  to  the  molten  metal.  Chemistry  was 
unknown. 

The  highest  wages  and  salaries  paid  in  the  early  iron  busi- 
ness would  mean  pauperism  in  the  Pittsburgh  of  to-day. 
There  is  scarcely  a  newsboy  in  the  Smoky  City  who  does  not 
make  more  money  than  the  first  furnacemen  and  forgemen 
of  Virginia  and  Massachusetts.  From  twenty  to  forty  cents 
was  considered  a  "  fair  day's  wage  for  a  fair  day's  work" 
when  James  I.  was  king.  For  a  while,  in  Massachusetts, 
employers  were  prohibited  by  law  from  paying  more  than 
twenty-eight  cents  a  day  and  board. 

283 


THE  ROMANCE   OF   STEEL 

THE   LOW   WAGES   OF  THE   PAST 

The  first  working-man  in  America  to  get  a  dollar  a  day 
was  John  Marshall,  of  the  iron-making  town  of  Braintree, 
Massachusetts.  He  was  probably  the  first  wage-worker  in 
the  world  to  climb  to  such  a  height  of  earning  power.  In 
the  year  1700  he  stood  at  the  head  of  the  labouring  masses  of 
all  countries.  Unaided  by  any  organisation,  relying  wholly 
upon  the  fact  that  he  was  the  best  mechanic  in  the  country, 
Marshall  compelled  the  employers  of  his  day  to  compete 
for  his  services  and  pay  him  his  price. 

Most  of  the  early  ironmasters  paid  the  lowest  possible 
wages,  and  often  grumbled  bitterly  because  their  men  de- 
manded anything  more  than  a  steady  job.  "  I  wish  there 
were  more  ironworks  in  the  country,"  said  Colonel  Spots- 
wood,  "  for  then  the  employers  could  consult  as  to  how  to  man- 
age their  workmen,  and  reduce  their  wages  to  what  is  just 
and  reasonable."  The  average  iron-worker  at  this  time 
received  about  forty  cents  a  day,  seldom  paid  in  cash. 

Richard  Leader,  who  came  from  Ireland  to  manage  the 
first  Lynn  iron-works,  received  five  hundred  dollars  a  year 
and  a  free  house.  Leader  was  the  Schwab  of  the  seventeenth 
century — a  competent,  forceful  manager,  but  at  that  time  the 
golden  age  of  steel  was  not  even  a  dream.  Up  to  the  year 
1750,  the  highest  wage  paid  by  any  ironmaster  was  eighty- 
four  cents  a  day,  which  was  the  rate  demanded  by  a  highly 
skilled  Cornish  mason  brought  over  to  build  a  furnace.  An 
average  iron-works  could  be  bought  for  about  fifteen  thou- 
sand dollars  or  less. 

Baron  Stiegel,  the  best-loved  employer  in  Pennsylvania, 
paid  his  most  expensive  men  two  hundred  dollars  a  year,  with 
a  free  house  and  free  firewood.  To  the  Pittsburgh  roller,  who 
often  earns  two  hundred  dollars  in  three  weeks,  such  an 
amount  seems  beggary;  but  at  the  time,  it  was  thought  to  be 

284 


PITTSBURGH 

ruinously  large.  All  European  ironworkers  received  less, 
so  that  it  was  cheaper  to  import  pig  iron  than  to  make  it. 

When  the  Western  States  began  to  open  up,  ten  years  after 
the  Revolution,  wages  rose.  In  the  frontier  towns  there  was 
a  great  demand  for  blacksmiths.  Any  labourer  who  knew  iron 
from  beeswax  could  set  up  a  little  shop  of  his  own.  One  des- 
perate ironmaster  advertised  that  he  would  give  twelve  dol- 
lars a  month,  board,  lodging;  and  whisky  every  day,  to  a 
furnaceman.  The  owner  of  a  negro  slave  usually  received 
eighty  dollars  a  year  for  his  labour. 

In  an  old  account-book  of  the  Hanover  furnace  I  find  that 
James  Down  is  charged  with  six  dollars,  "paid  him  to  git 
maried."  To  masters  and  men  alike,  a  dollar  was  as  big  as 
a  cart-wheel.  Few  talked  of  thousands — none  of  millions. 
Silver  was  hard  to  get,  and  gold  was  as  rare  as  diamonds. 
Finance  was  on  a  copper  basis,  so  far  as  the  wage -workers 
were  concerned.  When  copper  money  depreciated  in  1789, 
thousands  of  labourers  were  kept  for  weeks  on  the  verge  of 
starvation. 

High  wages  and  fabulous  profits  were  absolutely  unknown 
in  the  iron  and  steel  trade,  in  any  part  of  the  world,  until 
the  Carnegie  regime.  It  was  Pittsburgh  that  led  the  way. 
Even  David  Thomas,  after  he  had  achieved  fame  as  an 
able  ironmaster,  accepted  the  position  of  superintendent  of 
the  Crane  Iron  Works,  at  Catasauqua,  Pennsylvania,  in 
1839,  for  a  salary  of  less  than  twenty  dollars  a  week.  For 
every  new  furnace  that  he  built  and  operated  he  received 
a  raise  of  five  dollars  a  week.  The  fear  of  dying  rich 
was  an  unknown  terror  to  the  pioneer  iron-makers  of  Amer- 
ica. The  masters,  for  the  most  part,  were  struggling  with 
debt,  and  the  labourers  with  raggedness  and  hunger. 

In  fact,  while  many  of  the  early  ironmasters  were  men  of 
unusual  force  and  ability,  the  American  iron  trade  remained 
feeble  and  flickering  until  long  after  the  Revolutionary  War. 

285 


THE   ROMANCE   OF   STEEL 

The  obstacles  were  too  great  to  be  overcome  even  by  such 
giants  as  Joseph  Jenks,  the  Leonards,  Governor  Spotswood, 
John  England,  Baron  Hasenclever,  and  Squire  Faesch. 
Manufactured  products  made  in  America  were  not  as  popu- 
lar as  those  made  in  England,  and  there  was  a  general  opinion, 
plainly  shared  by  Jefferson,  that  America  was  to  remain  an 
agricultural  country. 

An  encouragement  to  American  manufacturers  was  given 
by  President  Washington  in  the  signing  of  the  first  tariff 
law,  but  it  was  ineffective.  The  first  popular  demand  for 
American  goods  came  in  1808,  when  it  became  known  that 
the  little  republic  had  paid  one  hundred  and  thirty-eight 
million  dollars  in  one  year  to  European  merchants  and  manu- 
facturers. "  What  will  become  of  a  nation  that  cannot  make 
its  own  socks?"  asked  the  editors  and  the  orators.  "Why 
should  all  the  knives  and  forks  in  the  country  come  from 
Sheffield?"  "Why  should  all  the  cloth  come  from  York- 
shire?" 

Prizes  were  offered  for  the  best  set  of  American  buckhorn- 
handled  knives.  A  "great  industrial  parade"  was  held  at 
Baltimore.  Soldiers  were  dressed  in  Virginian  cloth.  Stock 
companies  were  formed  to  build  factories  and  forges.  Henry 
Clay  eloquently  moved  a  resolution  in  the  Legislature  that 
every  member  of  it  be  compelled  to  wear  clothes  made  in 
America — a  suggestion  that  became  law  in  Virginia,  Ohio, 
Vermont,  and  North  Carolina.  This  step  was  opposed  by 
many  public  men,  Clay  being  obliged  to  fight  a  duel  because 
of  his  prominence  in  the  movement. 

The  total  capital  invested  in  the  iron  business  at  that  time 
was  estimated  at  seventeen  million  dollars — a  good  beginning 
when  we  remember  that  the  whole  republic  had  a  population 
barely  equal  to  that  now  possessed  by  Pennsylvania.  When 
Washington  became  President  the  annual  output  of  iron  was 

286 


PITTSBURGH 

worth  about  half  a  million  dollars  only.  Pennsylvania  had 
become  the  leading  iron-making  State,  with  an  equipment  of 
fourteen  small  furnaces  and  thirty-four  forges. 

Most  of  the  ore  mines  were  discovered  by  accident.  A 
story  is  told  in  an  old  history  of  a  miner  named  Jack  Howard, 
who  discovered  a  mine  in  a  peculiar  way.  He  was  walking 
home  from  his  work,  taking  a  shortcut  through  the  forest, 
when  he  noticed  that  the  needle  of  his  pocket  compass  was 
pointing  west,  instead  of  north.  He  told  this  strange  fact  to 
his  employer,  an  ironmaster  named  Stephen  Jackson.  Jack- 
son took  a  body  of  labourers  to  the  spot,  dug  at  the  place 
indicated  by  the  needle,  and  found  the  famous  "  Swedes " 
iron  mine.  In  Connecticut  it  was  a  custom  to  hunt  for  iron 
mines  with  a  peach  rod,  and  weird  tales  were  told  of  rods 
that  were  twisted  violently  out  of  the  iron-seeker's  hands  by 
the  attraction  of  the  ore. 

The  problem  of  transportation  was  everywhere  a  night- 
mare to  the  ironmaster.  No  other  articles  of  commerce  were 
as  heavy  as  those  which  he  handled ;  and  the  average  cost  for 
carrying  freight  a  hundred  years  ago  was  ten  dollars  a  ton 
per  hundred  miles.  As  much  as  one  hundred  and  twenty-five 
dollars  was  often  paid  for  the  transportation  of  a  ton  of 
freight  from  Philadelphia  to  Pittsburgh.  Bad  roads  and 
high  tolls  made  travel  an  expensive  hardship.  The  average 
toll-gate  fee  was  one  cent  per  horse  per  mile,  thus  compelling 
all  ironmasters  to  find  a  market  within  one  hundred  and  fifty 
miles  distance  from  their  furnaces. 

Exactly  a  century  ago  the  first  stage  ran  from  Pittsburgh 
to  Philadelphia,  arriving  in  four  days.  Fifteen  years  after- 
wards, two-day  stages  were  put  on  the  road,  charging  a  fare 
of  seventeen  dollars  per  passenger.  Every  trip  was  a  more 
or  less  perilous  adventure.  "  Now,  lean  to  the  right,  gentle- 
men! All  together  to  the  left,  gentlemen!"  Such  were  the 

287 


THE  ROMANCE   OF   STEEL 

constant  warnings  of  the  driver,  as  the  stage  swayed  and 
lurched  from  one  deep  rut  to  another.  In  all  parts  of  the 
country  life  flowed  along  slowly.  The  scow-ferries  between 
New  York  City  and  Brooklyn  could  seldom  be  paddled  across 
in  less  than  an  hour.  A  voyage  to  Europe  meant  from  forty 
to  ninety  days  of  discomfort  and  danger;  and  when  Fulton's 
first  steamboat,  the  Clermont,  waddled  from  New  York  to 
Albany  in  thirty-two  hours,  its  speed  was  the  wonder  and 
pride  of  the  republic. 

Iron  was  at  first  carried  on  pack-horses,  the  bars  being  bent 
into  the  shape  of  the  letter  U  to  fit  the  backs  of  the  horses. 
These  pack-horses  were  tied  head  and  tail,  and  led  in  divi- 
sions of  from  fifteen  to  a  hundred.  Often  the  path  was  found 
to  be  washed  out  and  horse  and  pack  rolled  down  a  steep 
slope.  At  other  times  an  overhanging  rock  or  branch  would 
throw  the  pack  to  the  ground. 

When  waggons  were  first  brought  into  use  the  pack-horse 
drivers  made  a  great  disturbance.  For  years  there  was  war 
between  the  carriers  and  the  waggoners;  and  so,  what  with 
these  feuds,  and  runaways,  and  upsets,  and  washouts,  and  In- 
dians, and  wild  beasts,  the  transportation  of  freight  across 
the  Alleghenies  was  about  as  uncertain  as  it  could  be. 

Incredible  as  it  seems  to-day,  there  was  no  railway  to  Pitts- 
burgh until  fifty-four  years  ago.  Those  who  first  proposed  to 
build  a  track  across  the  Alleghenies  were  regarded  as  insane. 
In  1850  a  prominent  government  official  gives  the  following 
account  of  an  interview  which  he  had  with  J.  Edgar  Thom- 
son, superintendent  of  the  Pennsylvania  Railroad: 

"  I  asked  him  how  he  expected  to  take  the  cars  over  the 
mountains.  *  By  locomotives,'  he  said.  Then  I  saw  the  man 
was  a  fool.  '  How  long  will  it  take  from  Pittsburgh  to 
Philadelphia?'  I  asked.  *  Fifteen  hours,'  he  replied.  Then 
I  knew  the  man  was  a  howling  idiot  and  I  left  him." 

288 


J.    J.    VANDERGRIFT 


OFTHE 

UNIVERSITY 

OF 


PITTSBURGH 

WHEN   IRON-MAKING   BEGAN 

The  iron-making  of  Pittsburgh  began  with  a  tragedy.  A 
gay,  fox-hunting  Frenchman,  named  Peter  Marmie,  who  had 
been  the  secretary  of  Lafayette,  went  into  partnership  with 
an  Englishman  named  Turnbull  and  built  the  Alliance  fur- 
nace— the  first  west  of  the  Alleghenies.  For  five  years  they 
made  iron;  but  Peter  Marmie  was  not  a  business  man.  At 
the  call  of  the  bugle  and  the  baying  of  the  hounds  he  rushed 
off  to  the  hunt  and  forgot  his  creditors.  He  had  a  short 
business  career,  and  a  merry  one.  The  shock  of  bankruptcy 
deranged  his  mind.  Before  the  furnace  went  out  of  blast, 
Marmie  called  his  hounds  around  him,  flung  them  one  by 
one  into  its  blazing  depths,  and  then,  with  a  wild  halloo, 
sprang  headlong  after  them. 

The  first  furnace  inside  the  town  limits  of  Pittsburgh  was 
built  by  a  German,  George  Anshutz.  It  was  a  small  furnace, 
and  failed  partly  for  lack  of  ore,  and  partly  because  the 
" Whisky  Boys"  burned  a  thousand  cords  of  wood  belonging 
to  Anshutz.  Close  after  him  came  William  Porter,  Joseph 
McClurg,  and  Count  de  Beelen,  an  enterprising  and  capable 
French  nobleman.  Of  these  three,  McClurg  did  the  largest 
business,  and  won  the  distinction  of  having  made  the  first 
iron-trade  fortune  in  western  Pennsylvania.  Joseph  McClurg 
was  the  first  rich  Pittsburgh  iron-master — the  forerunner  of 
a  thousand  millionaires. 

By  1 8 10  Pittsburgh  was  the  busiest  town  in  the  Ohio  Val- 
ley. It  was  the  centre  of  western  immigration  and  trade. 
Everything  and  everybody  going  west  from  Philadelphia  went 
by  way  of  Pittsburgh.  During  the  seven  summer  months  its 
unpaved  main  street  was  thronged  with  motley  caravans  of 
pioneers. 

A  rushing  business  in  canoes,  skiffs,  bateaux,  arks,  barges, 
and  keel-boats  was  carried  on  at  the  water-front.  None  of 

289 


THE   ROMANCE   OF   STEEL 

these  emigrant-boats  ever  came  back.  They  were  broken  up 
at  the  journey's  end  to  furnish  doors  and  windows  for  the 
little  log-cabin  homes  of  the  settlers.  It  was  in  Pittsburgh 
that  the  father  and  mother  of  Ulysses  S.  Grant  bought  the 
clumsy  barge  in  which  they  floated  down  the  Ohio  River  to 
Mount  Pleasant. 

When  the  war  of  1812  broke  out  Pittsburgh  was  the  proud 
possessor  of  its  first  rolling-mill.  It  must  be  confessed  that 
this  mill  rolled  nothing  but  sheet  iron,  but  it  had  "  a  most 
powerful  seventy-horse-power  engine,  and  a  rolling-mill,  tilt- 
hammer,  and  slitting-mill,  all  under  the  same  roof,"  which 
made  its  proprietor,  a  Scottish-Irishman  named  Christopher 
Cowan,  the  foremost  ironman  in  the  county.  About  this  time 
two  Welshmen,  the  Lewis  brothers,  were  coming  across  the 
ocean  as  stowaways.  They  made  their  way  to  Pittsburgh,  and 
became  the  first  rollers  of  bar  iron  in  this  country.  A  son 
of  one  of  these  men,  who  assisted  his  father  in  the  rolling  of  the 
first  bar,  died  in  Pittsburgh  only  twenty-three  years  since — a 
striking  evidence  of  our  industrial  youthfulness. 

In  the  same  year  that  the  first  bar  of  iron  was  rolled — 1816 
—Pittsburgh  was  made  a  city.  Not  for  nine  years  can  the 
smoky  city  celebrate  its  centennial.  It  began  with  a  popula- 
tion of  seven  thousand,  under  the  leadership  of  Mayor  Ebene- 
zer  Denny,  who  had  begun  his  business  career,  like  Andrew 
Carnegie,  as  a  messenger-boy.  Its  manufacturing  business 
had  risen  to  one  million  eight  hundred  and  ninety-six  thousand 
dollars  a  year.  In  all  its  shops  there  were  over  a  thousand 
workmen,  who  averaged  from  eight  to  nine  dollars  a  week. 
There  had  been  no  bankruptcy  for  three  years,  and  the  iron 
trade  was  booming.  One  skilled  steel-worker,  Abner  Upde- 
grafT,  had  actually  made  a  penknife  as  good  as  any  made  in 
England — a  feat  which  surprised  and  encouraged  the  young 
city.  A  few  optimists  went  so  far  as  to  prophesy  that  the  day 


290 


PITTSBURGH 

would  come  when  Pittsburgh  would  not  be  obliged  to  import 
iron  from  Great  Britain  and  pay  two  hundred  dollars  a  ton 
for  it. 

PITTSBURGH    AS    A    PORT 

Unknown  to  the  rest  of  the  world,  Pittsburgh  had  even 
become  a  ship-building  city.  Several  years  afterward  a  Pitts- 
burgh ship,  sailing  into  Genoa,  was  held  up  by  the  officer  of 
the  port.  "What's  this?"  said  he,  glaring  suspiciously  at 
the  ship's  papers.  "You  say  you  come  from  Pittsburgh? 
There  is  no  such  port.  Five  hundred  miles  inland?  Impos- 
sible! There  is  some  deception!  There  is  some  piracy  behind 
these  papers!  "  A  map  was  produced,  and  with  the  influence 
of  the  American  consul,  the  officer  of  the  port  was  at  last  con- 
vinced that  there  was  something  new  under  the  American  sun. 

The  new  business  of  floating  coal  down  the  river  in  barges 
brought  more  trade  to  Pittsburgh,  and  gave  many  of  its  future 
magnates  a  chance  to  begin  their  careers.  The  coal-boat  men 
were  a  jolly,  adventurous  crew,  equally  ready  for  a  wreck  or 
a  dog-fight.  Their  wit  was  shown  in  the  inscriptions  on  their 
boats,  generally  at  the  expense  of  the  cooks.  "  Three  precious 
souls  and  one  cook,"  said  one.  "  Beauty  and  the  Beast;  Beauty 
missed  the  boat,  but  the  cook's  aboard,"  said  another.  A  third 
bore  the  comparison,  which  delighted  the  onlookers  at  the 
docks:  "Capacity  of  boat  one  hundred  and  twenty  tons; 
capacity  of  cook,  two  quarts." 

As  the  shops  and  factories  increased,  Pittsburgh  became 
more  and  more  a  city  of  wage-workers.  Its  workingmen,  too, 
became  noted  for  their  spirit  of  sturdy  independence.  Mrs. 
Ann  Royal,  who  visited  the  city  in  1828,  went  so  far  in  her 
admiration  of  them  as  to  say:  "  The  workmen  of  Pittsburgh 
are  sober,  polite  and  gentlemanly.  They  are,  as  a  body,  the 
only  gentlemen  in  the  city.  Their  faces  are  as  black  as  coal; 


291 


THE   ROMANCE   OF   STEEL 

but  this  disguise  cannot  conceal  their  noble  mien  and  manly 
deportment." 

In  1835  Samuel  Pettigrew,  the  working  men's  candidate 
for  mayor,  was  elected  on  the  platform,  "Two  dollars  a  day 
and  roast  beef."  In  the  same  year,  in  a  dingy,  red-tiled 
cottage  in  the  little  Scottish  village  of  Dunfermline,  a  tiny 
baby  boy  was  born  into  the  family  of  a  poor  weaver  to  whom 
"  two  dollars  a  day  and  roast  beef"  would  have  been  a  dream 
of  affluence.  But  at  that  time  the  baby  knew  nothing  about 
Pittsburgh  and  Pittsburgh  knew  nothing  about  the  baby. 

For  sixty  years  Pittsburgh  made  iron.  Then  came  steel. 
There  was  little  or  no  steel  made  in  Pittsburgh  or  in  any 
other  American  city  until  1861,  when  the  Morrill  tariff  shut 
out  the  English  steel  and  gave  our  steel-makers  a  start.  The 
firm  of  Hussey,  Wells  &  Co.,  of  Pittsburgh,  was  the  first  to 
break  down  the  prejudice  that  existed  against  American  steel. 
Close  on  their  heels  came  such  men  as  Schoenberger,  Spang, 
Chalfant,  Singer,  Nimick,  Gregory,  and  Park.  These  were 
the  "  fathers  "  of  the  Pittsburgh  steel  business.  They  were 
men  of  the  old  school — simple,  rugged,  conservative;  con- 
tent with  a  progress  that  was  slow  and  sure.  Few  of  them 
made  millions,  and  none  grew  rich  quickly. 

Most  of  these  men  disapproved  of  the  new  Bessemer  pro- 
cess and  of  the  Carnegie  system  of  business.  They  were 
stunned  by  the  speed — the  machinery — the  millions — the  im- 
mense operations.  Carnegie's  giant  furnaces  and  vast  steel- 
mills  overwhelmed  their  little  old-fashioned  shops.  He— 
the  reckless  young  Scottish  plunger — was  borrowing  every 
cent  he  could  get  and  staking  it  all  on  steel.  And  while  the 
"fathers"  stood  shaking  their  heads  and  prophesying  disas- 
ters the  Carnegian  flood  rose  and  submerged  them.  In  the 
twinkling  of  an  eye,  so  it  seemed,  their  achievements  became 
ancient  history,  and  in  the  world  of  steel-makers  all  things 
wrere  new. 

292 


PITTSBURGH 

Then,  in  1901,  came  the  Morganisation  of  Pittsburgh.  The 
forming  of  the  steel  trust  made  it  the  most  thoroughly  organ- 
ised and  efficient  industrial  centre  in  any  country.  In  no 
other  workshop  of  the  human  race  is  there  so  little  of  the 
waste  and  friction  of  competition,  or  so  abundant  and  fluent 
a  supply  of  capital.  It  is  now  fortified  against  industrial 
depressions.  It  has  developed  beyond  the  uncertainties  of 
individual  ownership.  And  the  almost  incredible  story  of 
its  wealth  is  being  carried  to  all  quarters  of  the  earth. 

"  It  is  the  central  place,  and  always  will  be,"  said  H.  C. 
Frick.  "  The  steel  trade  will  concentrate  there  more  and 
more.  It  is  my  opinion  that  the  whole  organisation  of  the 
United  States  Steel  Corporation  ought  to  be  in  Pittsburgh." 

After  a  three  months'  study  of  Pittsburgh,  I  have  found  no 
sign  of  industrial  decay.  There  is  no  lagging — no  looking 
toward  the  past — no  decrease  in  energy  and  improvements. 
Back  of  its  iron  and  steel  business  there  is  the  irresistible 
push  of  two  billions  of  capital.  And  in  its  offices  and  mills 
are  the  veterans  who  still  hold  the  steel-making  championship 
of  the  world. 


293 


CHAPTER  X 
BIRMINGHAM  AND   PUEBLO 

The  Great  Iron  and  Steel  Industries  that  Have  Grown  Up  in  the  South  and 
the  West — Their  Marvellously  Rapid  Development,  the  Natural  Re- 
sources on  which  They  Are  Based,  the  Obstacles  They  Have  Had  to 
Overcome,  and  the  Men  Who  Have  Made  Them  What  They  Are. 

BIRMINGHAM  and  Pueblo— the  iron  cities  of  the  far 
South  and  the  far  West!  It  is  here  that  we  discover  the 
latest  and  most  sensational  development  in  the  world 
of  iron. 

If  there  be  any  American  playwright  who  is  planning  to 
write  the  Drama  of  Steel,  he  will  probably  find  more  material 
in  this  chapter  than  in  any  of  those  which  have  hitherto  been 
printed.  While  the  story  of  Pittsburgh  and  the  United  States 
Steel  Corporation  has  been  one  of  success — of  almost  monot- 
onous success — there  has  been  in  Alabama  and  Colorado  a 
vivid  alternation  of  light  and  shade — of  marvellous  victories 
and  equally  marvellous  defeats;  and  in  Colorado,  at  least, 
there  has  also  been  an  element  of  tragedy  which  is  not  found 
elsewhere. 

The  situation  in  Alabama  and  Colorado  is  strikingly  simi- 
lar. In  both  States  the  steel-makers  had  first  to  conquer  a 
wilderness.  They  had  to  create  an  industry  from  the  ground 
up.  Nothing  was  ready-made.  When  the  first  Birmingham 
furnace  was  built,  there  was  no  Birmingham;  and  the  great 
Pueblo  plant,  now  quite  encircled  by  the  city,  was  originally 
a  lonely  object  in  a  desolate  waste  on  which  no  living  crea- 
ture except  the  prairie-dogs  had  ever  been  able  to  make  a 
home. 

294 


BIRMINGHAM   AND    PUEBLO 

Another  coincidence  is  that  while  nature  has  provided  near 
Birmingham  and  Pueblo  such  an  abundance  of  the  many 
materials  that  the  iron-makers  need,  the  one  item  of  water 
seems  to  have  been  overlooked.  The  rivers  are  small,  except 
during  the  spring  freshets;  and  in  Pueblo  the  rainfall  is 
seldom  more  than  fourteen  inches  a  year.  The  Colorado 
men,  because  of  their  experience  in  irrigation,  have  recently 
solved  the  problem  by  spending  nine  hundred  thousand  dol- 
lars on  a  forty-three-mile  conduit;  and  if  Birmingham  carries 
out  its  present  plan  for  a  thirty-five-mile  conduit  neither  city 
will  need  to  fear  thirst  in  the  future. 

These  natural  obstacles  have  been  troublesome  enough;  but 
the  steel  kings  of  both  States  have  had  their  enemies.  They 
have  battled  with  labour-unions,  as  Frick  did  in  Pittsburgh, 
until  there  was  nothing  left  to  oppose  them. 

"  There  is  not  a  union  man  in  my  employ,"  said  both  John 
A.  Topping  and  the  late  F.  J.  Hearne,  the  two  great  generals 
of  the  iron  and  steel  armies  in  Alabama  and  Colorado. 

The  Legislature  in  each  State,  too,  was  at  first  hostile.  The 
steel  corporations  were  regarded  by  the  politicians  as  "big 
game  "  that  could  be  hunted  in  and  out  of  season  by  any  one 
who  had  a  fancy  for  the  sport. 

Both  Topping  and  Hearne,  so  it  happens,  were  from  Wheel- 
ing. Both  were  high  in  the  service  of  the  Steel  Trust,  and 
resigned  to  take  up  pioneer  work  in  the  South  and  West.  It 
is  also  true  that  several  of  the  same  capitalists  have  been  active 
in  both  States.  John  W.  Gates  and  E.  J.  Berwind,  for  exam- 
ple, were  among  the  first  Eastern  men  who  invested  money 
in  the  two  places.  And  at  the  present  time  both  States  are 
linked  together  by  E.  W.  Oglebay,  of  Cleveland,  who  is  a 
director  in  the  Colorado  Fuel  and  Iron  Company  and  also 
one  of  the  "  big  four "  in  the  Tennessee  Coal  and  Iron 
Company. 


295 


THE   ROMANCE   OF   STEEL 


THE    GREATNESS   OF   ALABAMA 

The  greater  of  the  two  States,  in  the  iron  and  steel  geogra- 
phy, is  Alabama.  In  fact,  there  are  three  things  in  which 
Alabama  has  no  equal  in  any  part  of  the  United  States- 
natural  resources,  cheap  labour,  and  the  convenient  handling 
of  raw  materials.  In  these,  Alabama  stands  first.  She  stands 
second  in  the  making  of  coke;  third  in  the  mining  of  ore; 
and  fourth  in  the  production  of  pig  iron. 

The  men  who  are  behind  Alabama  claim  to  have  no  less 
than  forty-two  billion  tons  of  coal  in  her  mountain  ranges- 
enough  to  last  the  whole  world  for  fifty  years. 

"We  have  two  hundred  million  tons  more  iron  ore,"  they 
say  "  than  the  United  States  Steel  Corporation.  On  an  actual 
investment  of  only  fifty  million  dollars,  we  have  now  in  our 
possession  a  property  worth  two  hundred  and  sixty-five 
millions." 

In  taking  these  figures  we  must  make  allowance  for  Ala- 
bama enthusiasm,  although  that  enthusiasm  is  in  itself  one 
of  the  State's  best  assets.  Alabama  does  not  need  to  exag- 
gerate. The  cold  facts  are  big  enough. 

Until  recently,  Alabama  stood  absolutely  alone.  It  was 
the  stronghold  of  competition,  the  despair  of  the  consolida- 
tors,  the  most  ambitious  and  aggressive  factor  in  the  whole 
world  of  iron  and  steel.  It  was  Alabama  that  pulled  the  cost 
of  iron  to  its  lowest  notch,  smashed  the  ore  pool,  upset  the 
prices  of  foundry  iron,  and  worried  Pittsburgh  into  nervous 
prostration.  And  it  is  still  Alabama  that  unsettles  the  future  of 
steel  and  wakes  up  the  Steel  Trust  from  its  dream  of  monopoly. 

The  Alabama  iron  business  has  no  ancient  history.  Thirty 
years  ago  Birmingham  was  a  corn-field.  Five  years  later  it 
became  a  village  of  rickety  shacks.  To-day  it  is  a  fairly  well- 
built  city,  entered  by  seven  railroads,  and  equipped  with  more 

296 


BIRMINGHAM   AND    PUEBLO 

than  a  hundred  miles  of  electric  street-railways.  It  stands 
like  a  great  smoky  sun  surrounded  by  a  dozen  little  smoky 
moons,  and  all  united  by  the  interlacing  of  a  thousand  miles 
of  mineral  railroad.  Its  industrial  army  of  twenty  thousand, 
mostly  negroes,  made  the  United  States  richer  by  seventy-five 
millions  in  1905,  piling  up  twelve  million  tons  of  coal,  sixteen 
hundred  thousand  tons  of  iron,  and  more  than  a  hundred 
thousand  tons  of  steel  rails.  As  yet,  it  can  scarcely  be  called 
a  manufacturing  centre,  as  the  goods  it  produces  are  mainly 
the  raw  materials  for  manufacturers.  But  Alabama  has 
arrived  where  Pennsylvania  was  twenty-five  years  ago, 
although  the  Southern  State  started  seventy-five  years  be- 
hind. Its  resources  are  being  developed  by  four  large  cor- 
porations, composed  mainly  of  New  York  capitalists.  All 
four  are  independent. 

There  is  not  a  dollar  of  Steel  Trust  money  in  Alabama, 
although  there  are  persistent  Wall  Street  rumours  to  the 
contrary.  Neither  is  there  any  immediate  probability  that 
its  four  largest  companies  will  consolidate.  If  they  do,  we 
shall  then  have  the  greater  and  the  lesser  Steel  Trust — the 
one  wholly  in  the  North  and  the  other  mainly  in  the  South — 
the  one  depending  on  white  labour  and  the  other  on  black 
—the  one  based  on  skill  and  the  other  on  cheapness.  Such 
will  be  the  battle  of  the  future,  say  some  of  those  who  take 
long  views  of  the  iron  and  steel  business. 

NATURE'S  GIFTS  TO  BIRMINGHAM 

Abram  S.  Hewitt,  who  had  a  wider  range  of  vision  than 
any  other  iron  and  steel  man  of  his  generation,  was  the  first 
to  discover  the  riches  of  Alabama.  Fifty  years  ago  he  secured 
an  option  on  a  farm  which  lay  where  the  skyscrapers  of  Bir- 
mingham stand  to-day,  and  had  the  whole  district  examined 
by  experts.  Then  came  the  Civil  War,  and  his  capital  was 

297 


THE  ROMANCE   OF   STEEL 

diverted  to  other  channels;  but  shortly  before  his  death  he 
said:  "The  two  great  centres  for  dominating  the  iron  and 
steel  of  the  world  are  to  be  the  Lake  Superior  region,  with 
its  Bessemer  ores,  on  the  one  side,  and  Alabama,  with  its 
basic  ores,  on  the  other.  Alabama,  with  its  abundant  stores 
of  iron  and  coal  and  limestone  in  such  close  proximity,  bids 
fair  within  the  next  quarter  of  a  century  to  dominate  the 
basic  steel  industry  of  the  world." 

Pittsburgh  boasts  of  her  magnificent  system  of  ore  railroads 
and  steamships.  "We  have  no  such  system,"  replies  Ala- 
bama, "  for  we  do  not  need  it.  Our  coal  and  ore  and  lime- 
stone lie  not  a  thousand  miles  away,  but  at  our  furnace  doors." 
The  cost  of  assembling  all  the  raw  materials  for  making  iron 
has  been  reduced,  in  Birmingham,  to  seventy-seven  cents  a 
ton.  This  is  the  lowest  point  ever  reached  in  the  iron  business, 
on  either  side  of  the  Atlantic. 

In  fact,  nature  has  made  Alabama  as  handy  as  a  pantry 
for  the  men  who  want  to  make  iron  and  steel.  There  is  one 
spot  especially  which  appeals  to  the  imagination  of  all  steel- 
makers who  visit  the  State.  Not  far  from  Birmingham,  on 
the  top  of  Red  Mountain,  you  can  stand  on  a  vein  of  iron  ore 
twenty-four  feet  thick.  On  your  right  are  the  vast  Warrior 
coal-fields.  On  your  left  are  the  Coosa  and  Cahaba  coal- 
fields. In  front  of  you  are  the  level  valleys,  packed  with 
enough  limestone  to  flux  all  the  ore  in  the  world;  and  all 
around  the  railroads  and  mines  are  the  greenish-yellow  fields 
of  corn  and  cotton,  to  supply  the  toilers  with  clothing  and 
with  food.  What  could  nature  do  more,  unless  it  made  green- 
backs and  preferred  stock  grow  on  trees? 

At  one  of  the  furnaces  it  would  be  quite  possible  for  a 
sharp-shooter  to  stand  on  the  water-tower  and  with  a  rifle 
send  a  bullet  into  the  mines  out  of  which  the  ore  was  dug. 
With  a  revolver  he  could  put  the  men  in  the  limestone  quar- 
ries in  danger;  and  with  a  pea-shooter  he  could  annoy  the 

298 


BIRMINGHAM   AND    PUEBLO 

workers  at  the  coke-ovens.  This  is,  of  course,  an  exceptionally 
well-located  furnace;  but  there  are  few  that  are  more  than 
ten  miles  from  their  raw  materials. 


DEBARDELEBEN'S  SPECTACULAR  CAREER 

The  Christopher  Columbus  of  this  wonderful  region  is  a 
man  who  is  still  alive,  active,  and  opening  up  new  treasure- 
fields — Henry  F.  DeBardeleben.  He  has  been  at  once  the 
most  successful  and  the  most  unfortunate  of  Alabama  pio- 
neers. Like  the  blind  hen  which  dug  up  worms  only  to  have 
them  snatched  away  by  her  lazy  barn-yard  companions,  he 
has  been  labouring  for  twenty-seven  years  to  enrich  others 
who  lacked  the  enterprise  and  hardihood.  He  is  the  million- 
aire-maker of  the  South.  He  earns  and  loses  fortunes  with 
the  indifference  of  a  stoic.  If  he  had  been  as  able  to  hold  as 
he  is  to  acquire  he  might  now  be  the  Andrew  Carnegie  of 
Alabama. 

DeBardeleben  was  at  one  time  owner  of  the  greater  part 
of  Red  Mountain,  in  which  lie  scores  of  buried  millions.  He 
was  the  creator  of  Bessemer,  the  Marvel  City  of  the  South. 
In  1892  he  was  probably  the  wealthiest  man  in  the  district, 
owning  the  pick  of  the  ore  and  coal  lands  near  Birmingham, 
and  also  furnaces,  coke-ovens,  and  the  like.  The  unusual 
sight  of  a  pioneer  in  control  of  millions  attracted  the  attention 
of  a  syndicate  of  New  York  capitalists.  They  approached 
DeBardeleben  diplomatically,  and  led  him  on  to  accept  two 
and  a  half  million  dollars  for  all  his  possessions.  This  was 
a  low  price,  as  the  property  was  rated  at  three  times  as  much 
a  few  years  later;  but  it  was  a  good  reward  for  a  dozen  years 
of  work,  and  DeBardeleben  concluded  to  retire. 

The  members  of  the  syndicate,  however,  had  other  plans 
for  his  future.  Several  of  them  brought  the  unsophisticated 
prospector  to  New  York,  and  taught  him  the  royal  art  of 

299 


THE   ROMANCE   OF   STEEL 

spending.  He  plunged  into  the  Wall  Street  wilderness  with 
his  usual  daring  and  self-confidence,  but  soon  learned  that  it 
was  unlike  the  Alabama  wilderness  in  which  he  had  found  his 
money.  In  six  weeks  he  had  lost  every  dollar  of  his  two  and 
a  half  millions. 

Finding  his  way  back  to  Birmingham,  he  appeared,  penni- 
less, in  the  office  of  the  New  York  corporation,  asking  for 
any  kind  of  employment.  He  was  taken  on  at  a  salary  of 
twenty-five  dollars  a  week — less  than  he  had  been  able  to 
spend  in  every  minute  of  his  memorable  six  weeks.  After  a 
short  time  he  was  discharged,  and  walking  the  streets  a  work- 
less,  propertyless,  moneyless  man,  deprived  by  magic,  as  it 
seemed  to  him,  of  the  enormous  wealth  he  had  created. 

But  those  who  imagined  that  his  career  was  ended  knew 
little  of  the  recuperative  power  of  DeBardeleben.  Striking 
into  the  depths  of  the  mountains  once  more,  he  took  up  the 
work  of  pioneering,  in  which  he  was  a  master,  and  with  his 
usual  success  located  new  beds  of  ore  and  coal.  At  present 
he  is  opening  up  a  rich  district  within  forty  miles  of  Bir- 
mingham. 

CAPTAINS  OF  ALABAMA  INDUSTRY 

Other  Alabama  pioneers  who  enlisted  in  the  regiment  of 
iron  and  steel  millionaires  are  the  Woodwards,  who  came 
from  Wheeling;  James  Bqwron,  who  grew  up  in  the  iron 
business  in  England;  Daniel  Hillman  and  his  son,  T.  T.  Hill- 
man,  who  made  the  first  Birmingham  iron.  These  men  and 
others  have  become  Alabamians.  They  are  remaining  in 
Birmingham  and  transforming  it  from  a  murky  region  of 
mines  and  furnaces  into  a  city  of  comfort  and  beauty. 

They  are  also  accumulating  local  capital,  so  that  the  dis- 
trict shall  not  remain  an  industrial  colony  of  New  York. 
In  the  centre  of  the  city  are  three  banks,  within  a  stone's 
throw  of  one  another,  in  whose  vaults  more  than  twelve  mil- 

300 


HENRY    F.    DE    BARDELEBEN 


OFTHE 

"   UNIVERSITY 

OF 


BIRMINGHAM   AND    PUEBLO 

lion  dollars  has  been  deposited — every  cent  of  it  coal  and 
iron  money.  A  business  of  more  than  fifty  millions  was  done 
in  1905  in  mining  and  manufacturing,  and  three  hundred 
thousand  freight-cars  were  handled  in  the  Birmingham 
district. 

And  who  are  the  enterprising  Northerners  whose  capital 
opened  up  this  land  of  opulence?  Many  of  them  are  men  of 
national  prominence,  among  them  being  August  Belmont,  S. 
L.  Schoonmaker,  Don  H.  Bacon,  Cord  Meyer,  Benjamin  F. 
Tracy,  James  T.  Woodward,  Alexis  W.  Thompson,  J.  Henry 
Smith,  Henry  R.  Sloat,  Albert  B.  Boardman,  J.  C.  Maben, 
and  G.  Watson  French. 

These  men  have  built  up  the  four  great  companies  that 
control  the  situation — the  Tennessee  Coal,  Iron  and  Railroad 
Company,  the  Republic  Iron  and  Steel,  the  Sloss-Sheffield, 
and  the  Alabama  Consolidated.  The  combined  capitalisa- 
tion of  the  "Big  Four"  is  seventy-six  millions.  All  are  suc- 
cessful concerns,  though  they  are  still  obliged  to  spend  an 
unusually  large  proportion  of  their  earnings  on  improve- 
ments. 

The  Tennessee  is  the  largest  corporation  in  the  South. 
Half  of  the  coal,  iron,  and  coke,  and  all  of  the  steel  made  in 
Alabama  come  from  this  giant  company.  Its  magnitude  is 
the  wonder  and  pride  of  Alabamians.  With  an  output  in 
1905  of  more  than  two  million  tons  of  coal,  six  hundred  thou- 
sand tons  of  iron,  a  million  tons  of  coke,  and  two  hundred 
thousand  tons  of  steel — with  a  property  of  seven  hundred 
square  miles  and  dozens  of  mines  and  furnaces — it  has  become 
one  of  the  most  effective  millionaire-making  machines  in  the 
country. 

In  the  last  five  years  it  has  paid  out  seven  millions  to  capi- 
tal and  twenty-five  millions  to  labour.  It  has  spent  seven 
millions  to  bring  its  mills  and  furnaces  up  to  the  Pittsburgh 
level;  and  it  is  now  adding  to  the  wealth  of  the  United  States 

301 


THE   ROMANCE   OF   STEEL 

at  the  rate  of  twelve  millions  a  year.  Every  year  it  wrenches 
from  Nature  enough  of  her  treasures  to  fill  a  freight-train 
that  would  reach  from  New  York  to  the  heart  of  Nebraska. 
While  many  of  its  mining  methods  are  primitive,  its  steel- 
mill  at  Ensley  is  one  of  the  most  completely  automatic  in 
the  world — operated  for  the  most  part  by  the  touching  of 
electric  buttons. 

Within  the  last  two  years  the  Ensley  rolling-mills  have 
shot  to  the  front  rank  by  making  the  first  open-hearth  steel 
rails.  Prior  to  this,  all  the  steel  used  for  rails  had  been  made 
by  the  Bessemer  process.  Several  high  authorities,  including 
a  superintendent  in  the  employ  of  the  Steel  Trust,  told  me 
that  the  new  Ensley  rails  were  "  the  finest  in  the  world."  The 
heavy  tonnage  on  many  railroads  has  created  a  demand  for 
a  higher  quality  of  rail,  and  the  Ensley  men  have  been  the 
first  to  supply  it  at  a  low  enough  price. 

How  the  Tennessee  Coal  and  Iron  was  reconstructed — how 
one  stern,  strong,  rugged  man  went  down  from  Minnesota 
and  began  to  transform  it  from  a  ramshackle  concern  into 
the  giant  of  Southern  corporations — is  a  story  in  itself,  spark- 
ling with  adventure;  and  some  day,  let  us  hope,  an  Ala- 
bamian  Sir  Walter  Scott  will  arise  and  tell  it  in  full. 

Don  H.  Bacon  is  the  name  of  the  man  from  Minnesota. 
Like  ninety-five  per  cent,  of  the  steel  kings,  he  was  a  graduate 
of  the  School  of  Toil.  He  began  in  a  telegraph  office.  When 
the  amazing  iron-mines  of  Minnesota  were  first  uncovered, 
Bacon  was  one  of  the  crowd  that  surged  into  the  State.  He 
was  only  one  of  the  leg-weary  rank  and  file  when  he  arrived ; 
but  when  he  exchanged  the  North  for  the  South,  in  1901,  he 
had  become  president  of  the  Minnesota  Iron  Company. 

Bacon  is  a  man  of  the  "Old  Hickory"  sort.  He  would 
sooner  work  than  play;  and  he  got  his  fill  in  Alabama.  He 
found  that  the  Tennessee  Coal  and  Iron  was  an  immense, 
loose-jointed  concern.  Its  ore  and  coal  lands  were  vast,  but 

302 


BIRMINGHAM   AND    PUEBLO 

its  equipment  was  a  medley  of  makeshifts.  In  New  York  it 
was  looked  upon  as  a  Wall  Street  football.  Its  .stock  went 
up  and  down  with  every  breeze  of  rumour.  Its  finances  were 
a  puzzle.  The  whole  company  had  been  slung  together  in 
a  very  slipshod  way. 

Bacon  was  not  allowed  to  have  a  free  hand  in  his  work  of 
reconstruction.  The  company  had  passed  into  the  control  of 
J.  T.  Woodward,  an  able  New  York  banker,  who  knew  much 
about  finance  but  nothing  about  iron.  In  spite  of  this  handi- 
cap, Bacon  began  his  house-cleaning  with  a  vim  that  startled 
the  whole  State  out  of  its  easy-going  ways.  He  fought  a  two- 
year  battle  with  the  coal  miners'  union,  and  won.  He  im- 
ported Huns,  Slavs,  Greeks,  Servians,  Italians,  and  Finns  to 
replace,  in  part,  the  unreliable  negroes.  And,  although  he 
was  a  miner  rather  than  a  steel-maker,  he  worked  out  a  new 
duplex  process  of  making  steel — a  combination  of  the  Besse- 
mer and  open-hearth  methods — which  promises  to  reduce 
costs. 

For  five  strenuous  years  Bacon  worked  like  a  Hercules. 
Then  the  control  of  the  company  fell  into  other  hands,  and 
he  was  displaced.  At  present  he  is  enjoying  his  first  long 
vacation  by  making  a  tour  of  the  world. 

The  new  owners  of  the  Tennessee  Coal  and  Iron  are  a 
syndicate  of  Northern  capitalists,  with  four  men  in  control — 
John  W.  Gates ;  Grant  B.  Schley,  a  conservative  Wall  Street 
broker;  Leonard  C.  Hanna,  a  brother  of  the  late  Senator 
Hanna;  and  Earl  W.  Oglebay,  a  veteran  ore-man  of  Cleve- 
land. George  A.  Kessler,  the  New  York  wine-importer,  has 
a  large  block  of  stock,  but  he  is  content  to  let  Gates,  Schley, 
Hanna,  and  Oglebay  do  the  work. 

This  new  syndicate  looms  large  in  the  steel  world.  Next 
to  the  Steel  Trust,  it  is  the  most  powerful  iron  and  steel  com- 
bination in  the  world.  It  has  bought  control  of  two  big 
companies — the  Tennessee  Coal  and  Iron  and  the  Republic 

303 


THE   ROMANCE   OF   STEEL 

Iron  and  Steel — so  that  it  can  now  march  a  hundred  millions 
to  the  field  of  battle.  It  has  twenty-five  thousand  men  on 
its  pay-rolls.  With  thirty-four  blast-furnaces,  twenty-five 
steel-mills,  and  a  hundred  mines  of  coal  and  iron  ore,  this 
powerful  aggregation  is  superior  to  anything  that  the  iron 
cities  of  Europe  can  show. 

One  man  has  been  placed  at  the  head  of  the  two  companies 
— John  A.  Topping,  who  began  as  an  office-boy  in  the 
Youngstown  district  and  climbed  to  the  highest  rungs  of  the 
ladder  in  Wheeling.  Topping  is  less  rugged  than  Bacon,  but 
equally  vigorous,  and  possesses  a  wider  knowledge  of  the 
iron  and  steel  industry.  He  is  a  handsome,  courteous  man  of 
forty-three — a  man  of  the  business  office  rather  than  of  the 
steel-mill. 

"We  are  still  under  the  head  of  reconstruction  down  in 
Alabama,"  he  said,  when  I  met  him  in  his  Broadway  office. 
"  The  Tennessee  Coal  and  Iron  is  now  being  run  to  make  iron 
and  steel,  not  for  Wall  Street  purposes.  Development — that 
is  our  main  object  just  now.  We  have  recently  placed  a  hun- 
dred steel  cars  on  our  tracks,  for  instance,  the  first  that  the 
South  has  ever  seen.  And  all  along  the  line  we  are  flinging 
out  whatever  is  flimsy  or  out  of  date." 

John  W.  Gates,  when  I  asked  him  to  outline  the  policy 
of  the  Alabama  enterprise,  painted  a  resplendent  picture  of 
its  future. 

"  We'll  spend  from  fifteen  to  twenty-five  millions  on  im- 
provements," he  said.  "  Topping  will  finish  what  Bacon 
began,  and  he  will  have  the  money — the  sinews  of  war — to 
make  everything  as  good  as  it  can  be.  This  campaign  of 
improvement  will  last  for  two  years  more.  It  will  take  nerve 
and  cash;  but  we  have  both.  Why  shouldn't  we  develop  that 
property?  We  have  a  billion  tons  of  coal.  We  have  enough 
ore  to  last  a  couple  of  centuries.  All  we  have  to  do  is  to  put 
our  house  in  order  and  go  ahead." 

304 


DON    H.    BACON 


'OFTHE 

UNIVERSITY 

OF 


'BIRMINGHAM   AND    PUEBLO 

The  second  largest  company  in  Alabama  is  the  Sloss-Shef- 
field.  It,  too,  has  been  a  big  money-maker.  It  pays  seven 
per  cent,  and  has  a  surplus  of  more  than  two  millions  in  the 
treasury.  Two  years  ago  it  surprised  its  stockholders  by  pre- 
senting them  with  a  thirty-three-and-one-third-per-cent.  divi- 
dend, payable  in  common  stock,  in  addition  to  the  usual 
profits.  Founded  twenty-three  years  ago  by  Colonel  J.  W. 
Sloss,  an  Alabamian,  it  was  taken  in  hand  by  New  York 
capitalists  and  developed  as  an  up-to-date  enterprise.  To-day 
Sloss  iron  is  famous  everywhere  among  foundrymen.  On  one 
occasion  Admiral  Melville  jocularly  explained  the  memor- 
able run  of  the  warship  Oregon  by  saying: 

"  You  know  she  was  built  of  Sloss  iron." 

Everything  new  must  run  the  gantlet  in  the  iron  and  steel 
world,  and  the  Alabama  iron  trade  has  had  to  fight  its  way 
up  in  spite  of  hard  knocks  from  the  older  States.  Twenty- 
five  years  ago,  when  the  first  Alabamians  tried  to  sell  their 
iron  in  the  North,  they  were  either  laughed  out  of  the  office 
or  suspiciously  regarded  as  confidence  men. 

"Iron  from  Alabama!  Ridiculous!  Wait  till  you  see  me 
buying  a  car-load  of  Alaska  oranges  and  then  you  can  talk 
about  your  Alabama  iron! " 

"We  prefer  to  use  Scottish  pig  iron,"  other  buyers  said, 
until  they  discovered  that  Alabama  iron  was  being  exported 
to  Scotland.  "  It  is  only  a  drop  in  the  bucket,"  they  declared, 
until  Alabama  became  the  fourth  iron-producing  State  in  the 
Union.  "  It  is,  of  course,  of  inferior  quality,"  they  main- 
tained, until  it  commanded  the  highest  price  in  the  market. 
"  It  is  well  enough  for  pipes  and  small  castings,  but  it  will 
never  do  for  castings  in  which  strength  is  required,"  they 
asserted,  until  it  was  found  to  be  almost  indispensable  for  the 
largest  castings.  "  It  is  first-class  in  foundries  but  it  will  never 
make  steel,"  they  averred,  until  the  Southern  railroads  began 
to  lay  their  tracks  with  the  steel  rails  of  Alabama.  "  Alabama 

305 


THE   ROMANCE   OF   STEEL 

is  cut  off  from  the  water,  and  therefore  it  can  never  have 
anything  more  than  a  local  market,"  they  argued,  until  they 
discovered  that  Birmingham  was  shipping  iron  direct  to 
Yokohama,  Japan,  at  a  through  rate  of  only  six  dollars  a  ton. 

Alabama  has  overcome  obstacles  of  nature  and  obstacles  of 
prejudice.  The  whole  United  States  made  very  little  more  iron 
thirty  years  ago  than  this  one  commonwealth  made  last  year. 
With  a  beginning  of  fourteen  rolling-mills,  Alabama  will, 
before  its  young  men  are  grey-haired,  be  competing  with 
Pennsylvania  and  Ohio  in  all  manner  of  finished  steel  prod- 
ucts, instead  of  making  the  comparatively  small  profit  that 
comes  from  the  sale  of  raw  materials. 

There  are  three  obstacles  that  Birmingham  has  not  yet 
been  Titanic  enough  to  surmount — the  scarcity  of  skilled  and 
industrious  workmen,  the  insufficiency  of  the  water-supply, 
and  the  menace  of  unfavourable  legislation. 

NEGRO  LABOUR   IN  ALABAMA 

Generally  speaking,  the  coloured  worker  of  Alabama  is  not 
a  success  when  he  is  taken  from  the  cotton-fields  and  harnessed 
to  the  chariot  of  coal  and  iron.  The  "  boss "  who  can  get  the 
best  work  from  a  crew  of  Southern  darkies  must  be  a  man 
of  unusual  natural  gifts.  A  Northerner  is  seldom,  if  ever,  suc- 
cessful. Captain  John  D.  Hanby,  a  born-and-bred  Southerner, 
superintendent  of  the  Sloss  mine,  near  Bessemer,  has  made 
his  gang  of  five  hundred  negroes  as  efficient  as  any  equal 
number  of  whites  could  be;  but  "  Cap  "  Hanby  is  an  excep- 
tion. He  is  the  oldest  mine  superintendent  in  Alabama,  in 
point  of  service,  and  probably  the  most  popular  man  in  the 
whole  district.  Generous,  bluff,  convivial,  one  minute  knock- 
ing a  negro  down  for  disobedience  and  the  next  minute  pick- 
ing him  up,  Hanby  is  an  ideal  Southern  mine-boss,  delivering 
the  ore  at  the  furnace  at  a  total  cost  of  sixty-three  cents  a  ton. 

306 


COL.    J.    W.    SLOSS 


BIRMINGHAM   AND    PUEBLO 

If  all  mine-bosses  had  his  rough-and-ready  mastership  the 
labour  problem  of  Alabama  would  be  solved — at  least  so  far 
as  the  interests  of  the  corporations  are  concerned. 

But  four-fifths  of  the  employers  report  trouble. 

"We  are  obliged  to  surround  ourselves  with  twice  as  many 
men  as  we  need,"  said  President  Maben,  of  the  Sloss-Shef- 
field  company,  "because  a  negro  refuses  to  work  more  than 
half  of  the  time.  Whenever  I  can  put  a  white  man  in  the 
place  of  a  negro,  I  do.  The  only  final  solution  is  white  labour, 
and  I  expect  that  we  shall  be  driven  to  bring  in  Italians  and 
Hungarians  from  the  North." 

Alabama  miners,  white  and  black,  work  only  thirteen  days 
a  month,  on  an  average.  This  is  not  a  guess,  but  the  result  of 
an  official  inquiry.  Not  one  negro  in  twenty  saves  any  money. 
As  long  as  a  negro  has  money  in  his  pocket  work  is  for  him  a 
remote  necessity.  When  he  is  in  the  mine,  any  phantom  of 
an  excuse  will  induce  him  to  quit.  He  will  stop  work  for  a 
revival,  for  a  circus,  for  his  grandmother's  birthday. 

There  are  no  skilled  negro  workers  in  the  steel-mills,  but 
a  few  have  risen  to  be  subcontractors  in  the  mines,  having 
from  eight  to  sixteen  negroes  under  them.  It  is  not  uncom- 
mon for  these  men  to  make  forty  dollars  a  week  or  more, 
when  there  are  no  accidents.  They,  of  course,  have  money  in 
the  bank  and  own  their  own  houses.  A  negro  driller  can 
make  two  dollars  a  day.  In  two  days  he  earns  enough  to  pay 
a  month's  rent  for  his  two-room  shack;  six  days  more  buys 
a  month's  supply  of  corn-meal  and  pork;  then  come  a  few 
days  for  debts,  and  a  few  days  for  whisky,  and  his  month's 
labour  is  happily  ended. 

The  average  negro  mining-camp  is  a  scene  of  squalor  and 
desolation.  The  work  is  hard  and  dangerous,  and  the  negroes 
react  from  it  into  rioting  and  drunkenness.  Alternate  drudg- 
ery and  dissipation  make  them  physical  wrecks  before  middle 
age,  so  that  if  it  were  not  for  the  constant  influx  of  new 

307 


THE   ROMANCE   OF   STEEL 

labourers  from  the  cotton-fields  they  would  soon  become  ex- 
tinct. A  few  are  joining  trade-unions  and  trying  heroically 
to  better  their  condition,  but  the  great  mass  are  slowly,  stead- 
ily sinking  beneath  the  increased  pressure  of  industrialism. 

The  present  lack  of  sufficient  water  is  a  drawback  which 
Birmingham  is  compelled  to  admit.  A  Philadelphia  water 
company  has  the  city  largely  at  its  mercy,  controlling  the  only 
near-by  sources  of  supply.  Sooner  or  later,  however,  and 
probably  with  State  aid,  a  conduit  will  be  built  from  a  river 
thirty-five  miles  distant,  which  will  meet  the  present  and  fu- 
ture wants  of  the  city. 

There  is  no  insuperable  obstacle  in  the  path  of  the  Ala- 
bama iron  and  steel  men.  They  have  behind  them  the  omnip- 
otence of  Eastern  capital,  and  the  expensive  experience  of 
Pittsburgh  can  save  them  from  making  a  great  many  mis- 
takes. They  are  served  by  seven  railroads,  and  will  soon  have 
three  more.  With  the  completion  of  the  Panama  Canal, 
which  will  put  Birmingham  in  close  touch  with  the  ports  of 
the  Pacific  Ocean,  the  men  of  Alabama  will  move  quickly 
on  to  their  golden  age. 

THE   ROMANCE   OF   COLORADO    IRON 

And  now,  Colorado!  It  is  the  most  remote  of  the  steel 
States,  from  a  New  Yorker's  point  of  view.  Therefore,  I 
went  to  it  last,  and  without  expecting  to  find  anything  of  un- 
usual interest.  Imagine  my  surprise  when  I  was  shown  a 
company  that  employs  sixteen  thousand  men  and  owns  seven 
hundred  square  miles  of  land,  a  twenty-four-million-dollar 
iron  and  steel  plant,  forty  villages,  two  railroads,  and  twenty- 
five  hundred  miles  of  telegraph.  Instead  of  a  struggling 
pioneer  enterprise,  manufacturing  more  experience  than  steel, 
here  was  an  affluent  company  with  four  millions  of  ready 
money  in  its  cash-drawer,  and  with  the  record  of  having  last 

308 


BIRMINGHAM   AND    PUEBLO 

year  added  more  than  twenty-two  millions  to  our  national 
wealth. 

Incredible  as  it  may  seem  to  Pittsburghers,  the  fact  is  that 
the  Colorado  Fuel  and  Iron  is  the  most  self-sufficient  and 
elaborate  of  all  steel-making  companies.  It  is  more  than  a 
business:  it  is  a  civilisation.  It  is  the  Robinson  Crusoe  of 
the  steel  world.  Its  isolation  has  compelled  it  to  become  a 
Jack  of  all  trades.  It  has  to  deal  in  lumber  as  well  as  in  iron; 
to  carry  its  own  water  through  a  forty-mile  conduit;  to  estab- 
lish forty  stores;  to  build  two  thousand  cottages,  and  to  make 
life  worth  living  for  sixty  thousand  people. 

"  In  this  self-reliant  State,"  said  its  late  president,  F.  J. 
Hearne,  "  we  are  compelled  to  develop  all  our  own  resources. 
We  must  make  the  best  of  what  we  have.  We  cannot  run  across 
the  road  to  a  neighbour  and  borrow  anything  we  happen  to 
need,  as  a  man  can  in  New  York  or  Pennsylvania.  We  are 
wholly  Western.  All  our  customers  are  west  of  the  Missouri 
River.  We  have  had  to  produce  practically  all  our  raw 
materials." 

Everything  about  this  company  has  a  flavour  of  the  big 
West.  Its  ore  and  coal  lands  are  scattered  through  five  States 
— Colorada,  Wyoming,  Utah,  New  Mexico,  and  California. 
Some  of  its  forty  villages  are  squatting  in  the  desert,  while 
some  are  perched  high  in  the  mountain  ranges,  two  miles 
above  the  level  of  the  sea.  Roughly  speaking,  it  is  a  wheel 
which  has  Pueblo  as  its  hub,  and  whose  diameter  is  a  thou- 
sand miles.  It  is  the  largest  industrial  corporation  in  the 
West;  and  in  Colorado  it  towers  as  high  above  all  other 
companies  as  Pike's  Peak  above  the  foot-hills.  The  men  on 
its  pay-roll  are  equal  in  number  to  one-tenth  of  the  male  citi- 
zens in  the  State. 

It  is  the  most  cosmopolitan  of  all  steel  companies.  While 
two-thirds  of  its  superintendents  are  American-born,  the  rank 
and  file  represent  thirty-two  nationalities.  Slavs  and  Italians, 

309 


THE   ROMANCE   OF   STEEL 

of  course,  are  here  in  swarms ;  and  there  is  a  large  detachment 
of  Mexicans,  who  live  in  grey  shanties  of  adobe  and  slabs, 
far  inferior  to  the  company  houses  in  the  mining  villages. 

For  the  amusement  of  its  sixteen  thousand  workmen  and 
their  families  the  company  has  organised  five  orchestras  and 
six  brass  bands.  For  their  health  it  has  built  a  magnificent 
hospital  and  formed  a  medical  department  with  a  staff  of 
fifty-four  doctors.  This  department  is  maintained  by  a  tax 
of  twelve  dollars  a  year  on  each  workman.  And  for  their 
instruction  it  has  established  thirteen  kindergartens,  forty 
travelling  libraries,  nine  clubhouses,  and  a  number  of  schools 
that  teach  sewing,  cooking,  embroidery,  bead-work,  and  so 
forth,  to  the  women  and  girls.  It  provides  a  series  of  free 
lectures  on  art,  literature,  and  travel.  It  even  issues  fatherly 
bulletins  against  tobacco,  socialism,  mosquitoes,  and  other 
annoyances. 

This  imperial  corporation  is  now  producing,  yearly,  about 
two  million  tons  of  iron  and  steel,  and  five  million  tons  of 
coal.  It  makes  rails  mainly,  but  also  bar  iron,  spikes,  bolts, 
nails,  and  wire.  Its  assets  are  fifty-five  millions,  and  its  net 
annual  earnings  three  millions.  All  told,  in  the  fourteen 
years  of  its  existence  it  has  made  twenty  millions  in  profits. 

THE    STORY    OF    PUEBLO 

As  yet,  the  extraordinary  history  of  this  company  has  never 
been  written.  Even  for  this  short  sketch,  all  the  facts  had  to 
be  gathered  from  living  men,  not  from  books  or  from  maga- 
zines. It  is  a  strange  fact  that  while  Denver  has  many  able 
writers,  as  its  newspapers  show,  none  of  them  has  set  down 
the  wonderful  story  of  Pueblo  and  the  men  who  made  it  the 
Pittsburgh  of  the  West. 

In  the  first  place,  it  was  coal,  not  iron  ore,  that  lifted  Colo- 
rado up  among  the  iron  and  steel  States.  She  has  eighteen 

310 


BIRMINGHAM  AND    PUEBLO 

thousand  square  miles  of  coal  lands — nearly  enough  to  make 
two  New  Hampshires.  About  thirty  years  ago,  two  young 
railroad  men  went  to  the  Centennial  State  to  find  coal.  Their 
names  were  J.  C.  Osgood  and  A.  H.  Danforth.  A  few  years 
later  Danforth  was  at  the  head  of  a  prosperous  coal  com- 
pany, and  in  1881  he  had  begun  to  make  iron  and  steel  at 
Pueblo,  with  "Dan"  Jones,  of  Johnstown,  as  manager,  and 
General  W.  J.  Palmer  as  his  backer.  The  following  year 
Osgood,  too,  became  a  capitalist.  He  organised  the  Colo- 
rado Fuel  Company,  capitalised  at  twenty  thousand  dollars. 
His  visible  assets,  at  first,  consisted  of  a  lease  of  one  anthracite 
coal-mine — nothing  more;  but  his  company  lived  and  pros- 
pered. 

In  1892  these  two  enterprises  united  under  the  present 
name  of  the  Colorado  Fuel  and  Iron  Company.  At  the  head 
of  the  concern  was  Osgood,  with  three  of  his  personal  friends 
-Julian  A.  Kebler,  Alfred  C.  Cass,  and  John  L.  Jerome — 
as  his  cabinet  officers.  These  men — the  "big  four,"  as  they 
were  sometimes  called — ruled  the  company  for  ten  years. 
They  were  the  pathfinders  of  the  Western  iron  and  steel  busi- 
ness. They  were  strong  men,  and  what  they  did  was  well 
done.  As  yet,  Colorado  is  too  young,  too  unreflective,  to 
appreciate  its  pioneers,  but  one  day  there  will  come  some  sort 
of  public  recognition  of  their  work. 

Osgood  was  a  man  of  rare  ability,  and  more.  He  had  the 
knack  of  finding  the  right  man  for  each  place.  Paul  Morton 
worked  under  him  for  six  years.  D.  C.  Beaman  was  his  legal 
adviser.  Richard  C.  Hills  was  his  mining  engineer.  Ex- 
Governor  Grant  and  Senator  Wolcott  buttressed  him  polit- 
ically. The  Eastern  steel-men  said  he  could  not  make  steel 
in  Colorado;  but  he  changed  their  minds. 

"I  sold  one  batch  of  rails  to  the  Santa  Fe  Railroad,"  he 
told  me,  "  on  condition  that  they  laid  them  in  Joliet,  in  front 
of  the  steel-plant  of  the  Illinois  Steel  Company." 

311 


THE  ROMANCE   OF   STEEL 

Osgood  had  caught  the  spirit  of  Colorado.  Nothing  was 
too  hard  for  him  to  accomplish.  Nothing  was  too  wonderful 
to  be  true. 

It  is  said  that  when  Lieutenant  Pike  discovered  Pike's  Peak, 
in  1806,  he  spent  two  weeks  trying  to  climb  it.  Then  he  gave 
up  his  attempt,  and  declared  that  "  no  human  being  can  ever 
ascend  to  its  pinnacle."  If  he  could  visit  the  Peak  to-day  he 
would  find  a  hotel  on  its  summit  and  trains  running  up  and 
down  on  a  cog  railway,  as  if  the  proud  old  mountain  were 
nothing  but  a  commonplace  hill. 

And  so,  all  through  Colorado,  there  were  many  equally 
"  impossible  "  things  being  done.  Men  were  swept  forward 
by  an  irresistible  optimism,  and  in  front  of  the  crowd  rushed 
Osgood,  borrowing  and  building,  and  building  and  borrow- 
ing, until  he  had  actually  created  a  new  Pittsburgh  at  the  foot 
of  the  Rockies. 

In  seven  years  he  raised  his  investment  securities  to  forty- 
six  millions.  He  swelled  his  labour  army  from  five  thousand 
to  fifteen.  He  built  furnaces  and  steel-mills  until  Pueblo 
was  lost  in  smoke.  He  added  tract  to  tract  until  he  owned 
a  realm  half  as  large  as  the  State  of  Rhode  Island.  There 
was  good  reason  for  his  optimism.  The  Aladdin's  lamp  of 
the  steel  business  was  in  his  hands,  and  he  rubbed  it  until  the 
genie  was  fairly  worked  to  death. 

But  he  and  his  helpers  were  men  of  force  and  shrewdness 
as  well  as  of  enthusiasm.  They  had  as  much  caution  as  any- 
body had  in  those  exuberant  days.  They  were  genial  and 
popular. 

Whether  business  was  good  or  bad,  Osgood  never  reduced 
wages.  Kebler,  too,  was  everybody's  friend.  He  was  beloved 
by  the  workmen,  because  of  the  sincere  interest  he  took  in 
their  welfare. 

"  Kebler  once  abandoned  a  dangerous  mine  that  was  very 
valuable,"  said  an  old  miner,  "  and  when  he  was  asked  why 

312 


JOHN    CLEVELAND    OSGOOD 


BIRMINGHAM   AND    PUEBLO 

he  did  so  he  replied :    *  That  mine  cost  us  a  hundred  thousand 
dollars,  but  it  is  not  worth  one  man's  life.' ' 

In  1898  the  UC.  F.  and  I."  stock  became  active  in  Wall 
Street.  John  W.  Gates  picked  up  some  of  it,  and  had  him- 
self made  a  director.  He  added  fuel  to  the  Osgood  flame.  In 
fact,  he  was  soon  outbooming  the  boomers.  He  helped  them 
to  borrow  fifteen  million  dollars  more,  through  a  Chicago 
bank,  and  cheered  them  on  until  every  cent  was  spent  on  a 
series  of  immense  steel-mills.  Sixteen  hundred  thousand  dol- 
lars of  this  money  he  loaned  out  of  his  own  pocket. 

A    PERIOD    OF    STORM    AND    STRESS 

In  1902  Gates  conceived  the  idea  of  making  himself  the 
Steel  King  of  the  West.  He  bought  "  C.  F.  and  I."  stock, 
and  hired  proxies,  until  he  felt  sure  of  his  prize.  Then  he 
charged  upon  Osgood  with  his  special  car  loaded  with  lawyers 
and  prospective  directors.  For  a  week  the  battle  raged.  At 
the  final  show-down  Gates  held  the  most  proxies,  but  the  law 
of  Colorado  was  on  the  side  of  Osgood.  Gates  lost,  and  re- 
tired to  Chicago. 

But  the  Eastern  giants  of  capital,  so  it  seemed,  had  made 
up  their  minds  to  possess  the  Colorado  Fuel  and  Iron  Com- 
pany. The  second  assailant  who  loomed  up  was  the  strenu- 
ous E.  H.  Harriman.  With  Edwin  Hawley  to  help  him, 
Harriman  gave  battle  to  Osgood.  At  first  it  appeared  as  if 
the  man  from  Colorado  would  be  swallowed  up  by  the  big 
railway  magnate;  but  in  the  nick  of  time  a  deliverer  came  to 
Osgood's  rescue.  This  was  no  less  a  personage  than  John  D. 
Rockefeller,  Jr.,  with  whose  help  Harriman  was  soon  as  com- 
pletely routed  as  Gates  had  been,  and  Osgood  had  the  grim 
satisfaction  of  knowing  that  he  had  beaten  off  two  of  the  most 
renowned  warriors  in  the  whole  realm  of  commerce. 

George  J.  Gould,  too,  had  become  a  large  holder  of  Os- 

313 


THE  ROMANCE   OP  STEEL 

good's  stock,  and  he  declared  himself  willing  to  co-operate 
with  Rockefeller  in  the  protection  of  the  property.  Having 
made  this  Gould-Rockefeller  alliance,  Osgood  thought  that 
all  his  perils  were  past.  He  and  his  faithful  comrades  had 
at  last  reached  the  seats  of  the  mighty,  after  an  up-hill  fight 
of  ten  years. 

Then  the  wheel  of  fortune  turned.  Instead  of  affluence 
there  was  a  whirlwind  of  disaster  and  death.  In  less  than 
eleven  months  three  of  the  "  big  four  "  were  dead,  the  fourth 
was  an  outsider,  and  the  great  corporation  was  in  other  hands. 
In  the  whole  history  of  steel  I  have  not  found  a  more  remark- 
able tragedy  than  this. 

No  one,  apparently,  was  to  blame  for  this  tragic  climax. 
Osgood  resigned  in  the  spring  of  1903,  because  he  found  that 
he  was  overshadowed  by  his  new  partners.  When  he  at- 
tempted to  market  some  bonds  he  discovered  that  his  com- 
pany was  regarded  as  a  Gould-Rockefeller  enterprise.  To  a 
man  of  his  independent  spirit,  this  was  not  to  be  endured. 

"  I  refuse  to  work  as  a  hired  man,"  he  said,  "  no  matter  who 
the  employers  may  be,  or  how  high  the  salary." 

He  arranged  to  turn  over  full  control  of  the  company  to 
the  New  York  men  on  condition  that  they  would  retain  his 
employees  and  meet  all  financial  obligations.  The  depres- 
sion of  1903  did  much  to  push  him  to  this  decision,  as  the 
plant  was  in  immediate  need  of  more  capital  for  improve- 
ments. 

The  following  month  Cass  died  of  consumption.  Five 
months  later  the  big-hearted  Kebler  collapsed,  with  a  clot  of 
blood  on  his  brain,  and  fell  lifeless  upon  his  bed.  The  next 
day  Jerome  heard  of  Kebler's  death,  staggered  to  a  couch, 
and  in  a  few  hours  breathed  his  last.  Osgood  is  still  an  active 
capitalist  in  the  prime  of  life;  but  he  is  no  longer  a  steel  king. 
As  a  Westerner  would  say,  "he  whistled  for  the  grizzly,  and 
the  grizzly  came." 

3H 


JOHN    D.    ROCKEFELLER,    JR. 


BIRMINGHAM  AND    PUEBLO 

FRANK    J.   HEARNE    IN    COMMAND 

As  the  successor  to  Osgood,  Rockefeller  and  Gould  chose 
one  of  the  Steel  Trust's  subpresidents,  Frank  J.  Hearne. 
Hearne  had  been  a  lifelong  friend  of  Frick — had,  in  fact, 
given  Frick  his  first  order  for  coke,  in  1873;  and  it  was  Frick 
who  recommended  him  as  the  best  man  to  grapple  with  the 
Colorado  situation.  At  once  Hearne  became,  and  was  until 
his  recent  death,  the  dominant  figure  in  the  iron  and  steel 
world  of  the  West. 

Hearne  was,  first  and  last,  a  man  of  business.  He  worked 
from  choice,  not  from  necessity.  Years  ago  he  was  part  owner 
in  an  hereditary  iron-plant,  which  was  sold  for  nearly  ten  mil- 
lions to  the  Tube  Trust.  As  it  happened,  he  started  life  on 
the  higher  rungs  of  the  ladder,  but  he  would  have  been  one 
of  the  thousand  millionaires  of  steel  in  spite  of  any  handicap. 
He  had  the  business  mind.  He  stepped  from  the  college  hall 
to  become  the  chief  engineer  of  a  railroad,  and  for  forty  years 
he  was  one  of  our  most  active  industrial  generals.  He  could 
be  a  fighter,  if  fighting  was  the  game,  or  a  politician,  or  a  finan- 
cier, or  a  manufacturer.  He  was  the  Frick  of  Colorado. 

When  he  arrived  in  Denver  he  found  an  extraordinary 
situation.  Instead  of  having  a  vast  store  of  raw  materials 
and  a  ramshackle  plant,  such  as  Bacon  had  at  first  in  Ala- 
bama, Hearne  saw  at  Pueblo  an  immense  plant,  so  large  and 
well  equipped  that  its  ore-mines  could  scarcely  keep  it  in 
operation.  Osgood  had  lavished  millions  upon  his  steel- 
mills;  but  his  ore  lands  were  in  great  need  of  development. 

"  I  found  an  enormous  tin-plate  mill,"  said  Hearne.  "  It 
was  so  large  that  it  could  have  supplied  the  whole  West  by 
running  one  month  each  year.  There  were  two  rod-mills, 
when  one  was  too  many.  The  ore-fields  were  overrated.  One 
was  said  to  contain  a  fifty-year  supply,  and  we  exhausted  it 
in  twelve  months.  Another,  supposed  to  be  capable  of  yield- 

315 


THE   ROMANCE   OF   STEEL 

ing  enough  for  generations  to  come,  was  cleaned  out  in  two 
years." 

Delving  into  the  finances  of  the  company,  Hearne  found 
it  in  immediate  need  of  money.  His  first  act  was  to  telegraph 
to  Gould  and  Rockefeller: 

"  Unless  I  get  a  million  dollars  at  once,  I  cannot  guarantee 
that  the  sheriff  won't  be  in  here  next  Saturday  night." 

The  million  was  sent;  and  later  the  company  was  refinanced 
in  such  a  way  as  to  place  thirteen  millions  at  his  disposal. 

"  You  are  to  have  a  free  hand  and  all  the  money  you  need," 
said  his  big  employers. 

Hearne  sternly  put  a  stop  to  all  vague  talk  regarding  the 
company's  resources. 

"  Let  us  get  down  to  the  raw  truth,"  he  said.  "  Enthusiasm 
is  not  ore! " 

He  opened  up  new  mines,  until  to-day  the  ore  supply  will 
carry  the  company  along  until  1940,  or  longer.  In  the  mills, 
he  cut  down  everything  that  rose  above  the  utility  line.  For 
instance,  one  of  his  foremen  recently  stopped  him  as  he  was 
walking  through  the  works  and  said: 

"  Mr.  Hearne,  I  must  have  a  pair  of  iron  gates  put  up 
here." 

"Certainly,  John,"  replied  Hearne;  "  but  just  figure  it  out 
first,  and  let  me  know  how  much  the  gates  will  decrease  costs 
or  increase  the  output." 

In  short,  while  Osgood  was  not  a  practical  iron-man, 
Hearne  was.  While  his  predecessor  was  battling  single- 
handed  to  build  up  a  giant  industry,  Hearne  had  behind  him 
the  irresistible  force  of  the  Gould  and  Rockefeller  millions. 
While  Osgood  was  at  the  mercy  of  the  railroads,  the  Gould 
and  Rockefeller  lines — now  a  vast  system  of  twenty-five  thou- 
sand miles — provide  freight  rates  that  are  as  low  as  they  need 
be.  The  periods  of  pioneering  and  speculation  have  gone  by, 
and  the  era  of  stability  has  arrived.  The  mistakes  of  the  past, 

316 


FRANK    J.    HEARNE 


OF  THE 

UNIVERSITY 


BIRMINGHAM   AND    PUEBLO 

of  course,  have  been  capitalised.  The  "  C.  F.  and  I."  sowed 
its  wild  oats,  as  all  steel  corporations  do  in  their  youth.  It 
is  carrying  a  burden  of  seventy-five  millions  to-day,  in  the 
total  of  its  investment  securities.  Three-fifths  of  this  load 
was  put  upon  it  by  Osgood,  and  two-fifths  by  Gould  and 
Rockefeller.  From  Osgood's  point  of  view,  the  plant  was 
not  at  all  overbuilt. 

"  If  I  had  been  left  in  control,"  he  said,  "  I  would  naturally 
have  been  more  expeditious  in  opening  up  new  mines,  as  I 
was  thoroughly  familiar  with  the  whole  property.  It  is  alto- 
gether a  mistake  to  suppose  that  the  Colorado  Fuel  and  Iron 
Company  was  an  experiment  until  it  fell  into  the  hands  of 
Eastern  capitalists.  Not  one  pound  of  ore  is  being  mined 
except  on  lands  which  I  had  secured;  and  when  I  withdrew 
from  the  company  it  possessed  the  same  forty-year  supply 
which  it  owns  to-day.  The  truth  is  that  in  1902  the  company 
was  employing  nearly  as  many  men,  and  making  quite  as 
much  money,  as  it  did  later  under  the  able  management  of 
Mr.  Hearne." 

No  one  but  a  steel-maker  can  fully  appreciate  the  wonder- 
ful achievement  of  J.  C.  Osgood.  Even  in  Pennsylvania, 
where  one  mill  holds  up  another,  the  average  steel-plant  has 
had  to  struggle  through  an  infancy  of  debt  and  disaster.  Car- 
negie, with  the  powerful  backing  of  the  Pennsylvania  Rail- 
road, barely  saved  himself  on  several  occasions.  Yet  this 
sturdy  Westerner,  with  a  hundred  handicaps  and  disadvant- 
ages, played  a  lone  hand  successfully  for  ten  years,  and  built 
up  the  largest  industry  of  the  whole  Southwest. 

THE    WORKSHOP    OF    THE    WEST 

The  fact  is,  though  few  Easterners  are  aware  of  it,  that 
Colorado  has  been  transformed  from  "  the  playground  of  the 
republic"  into  the  workshop  of  the  West.  The  steel  lariats 

317 


THE   ROMANCE   OF   STEEL 

of  twenty  railroads  now  loop  themselves  around  her  snowy 
peaks  and  across  her  irrigated  farmlands.  She  has  taken 
eight  hundred  millions  in  gold  and  silver  from  her  treasure- 
hills.  She  has  tamed  her  section  of  the  desert  into  a  prairie 
garden,  until  the  output  of  her  acres  is  greater  than  that  of 
her  mines.  And,  most  important  of  all  from  the  manufactur- 
ing point  of  view,  she  is  producing  vast  quantities  of  coal. 

Her  financial  and  political  centre  is  Denver,  a  remarkably 
handsome  city  of  nearly  two  hundred  thousand  people- 
where,  by  the  way,  the  finest  residence  in  town  is  owned  by 
a  Carnegian  steel  king,  Lawrence  C.  Phipps.  But  the  manu- 
facturing centre  of  Colorado  is  Pueblo,  three  hours'  ride  to 
the  south.  Pueblo  seems  to  have  been  designed  by  nature  as 
an  industrial  metropolis.  It  is  central,  and  on  comparatively 
low  ground,  so  that  the  heavy  coal  and  ore  trains  run  down 
easily  to  its  mills  and  factories  and  smelters.  The  Arkansas 
River  twists  out  of  its  mountain-clefts  a  few  miles  away  and 
zigzags  through  the  city;  and  the  largest  coal-mines  are 
within  sixty  miles.  Generally  speaking,  its  raw  materials  are 
above  it  and  its  market  below — two  very  important  facts  from 
the  standpoint  of  freight  rates. 

Of  all  the  iron  cities  of  the  world,  Pueblo  has  the  most 
picturesque  location.  It  stands  three-quarters  of  a  mile  above 
the  level  of  the  sea,  at  the  foot  of  the  red  crags  of  the  Rockies. 
Its  smoke  is  blown  against  the  hoary  head  of  Pike's  Peak, 
fifty  miles  northward.  To  the  east  stretch  a  thousand  miles 
of  level  field  and  mesa,  across  which  come  five  busy  railroads. 

It  is  the  scenic  beauty  of  the  place,  no  doubt,  which  has 
inspired  its  citizens  to  make  it  the  handsomest  city  of  its  size 
in  the  West.  It  is,  in  fact,  the  only  beautiful  steel  town  in 
the  United  States.  With  the  exception  of  Essen,  in  Germany, 
I  have  found  no  iron-making  centre  in  any  country  which 
takes  so  keen  an  interest  in  its  own  appearance. 

For  example,  although  its  population  is  less  than  seventy 

318 


BIRMINGHAM   AND    PUEBLO 

thousand,  Pueblo  has  twelve  parks,  most  of  which  are  well 
kept.  In  one  of  these  stands  the  Mineral  Palace — a  really 
notable  building,  in  which  are  Titanic  figures,  enthroned, 
representing  King  Coal  and  Queen  Silver,  while  around  them 
is  gathered  a  unique  exhibition  of  the  mineral  affluence  of 
Colorado. 

" Watch  Pueblo's  smoke"  is  the  motto  of  this  ambitious 
city.  Last  year  the  men  who  work  under  the  smoke  produced 
fifty  million  dollars'  worth  of  commodities.  The  city  has 
twelve  million  dollars  in  its  banks.  And  now  that  the  force- 
ful and  efficient  George  J.  Gould  has  taken  the  capital  and 
experience  of  the  East,  and  the  energy  and  skill  and  natural 
wealth  of  the  West,  and  focussed  them  all  at  Pueblo,  there  is 
every  reason  to  belive  that  this  Pittsburgh  of  the  Rockies  will 
play  an  important  part  in  the  iron  and  steel  drama  of  the 
future. 


CHAPTER   XI 
STEEL  KINGS  OF  MANY  CITIES 

Makers  of  Iron  and  Steel  Who  Are  Not  in  the  United  States  Steel  Corpora- 
tion— The  Ore  Fields  of  the  Northwest,  and  the  Recent  Great  Northern 
Ore  Deal — Steel-Making  Has  Become  a  Game  Only  for  the  Multi- 
millionaire. 

NOW  that  Carnegie  has  abdicated  the  throne,  who  is 
the  new  steel  king  of  Pittsburgh? 
This  is  a  question  which  few  steel  men  can  answer 
on  the  spur  of  the  moment.     Such  was  the  prestige  of  Car- 
negie— his  reign  was  so  long  and  its  termination  was  so  glori- 
ous— that  our  eyes  are  light-blinded.     We  fail  to  recognise 
the  young  prince  upon  whom  the  honour  has   descended. 
And  our  difficulty  is  still  greater  because  the  new  monarch 
dislikes  publicity  as  much  as  Carnegie  loved  it,  and  he  has 
refused  to  allow  any  manner  of  public  coronation. 

The  new  uncrowned  steel  king  of  Pittsburgh  is  B.  F.  Jones, 
president  of  the  thirty-million-dollar  firm  of  Jones  &  Laugh- 
lin,  and  this  is  probably  the  first  public  announcement  of  his 
kingship. 

Benjamin  Franklin  Jones  is  a  young  man.  He  was  born 
to  the  purple.  His  father — Benjamin  Franklin  Jones — made 
steel  in  Pittsburgh  for  over  half  a  century,  and  was  the  official 
head  of  all  American  steel-makers  for  eighteen  years.  The 
Jones  &  Laughlin  firm  is  the  biggest  independent  concern  in 
Pittsburgh,  and  it  is  the  only  one  in  the  United  States  that  is 
conducted  along  the  old  lines.  It  is  run  on  the  Carnegie  plan. 
There  is  no  stock  for  sale.  It  is  a  close  family  corporation. 
No  one  enters  it  except  by  birth  or  marriage.  It  is  under- 
capitalised. No  wires  run  from  Wall  Street  to  its  offices.  It 

320 


LAWRENCE    C.    PHIPPS 


^^    OF  THE 

UNIVERSITY 

OF 


STEEL    KINGS   OF   MANY   CITIES 

has  no  more  use  for  tickers  than  for  telescopes.  It  co-oper- 
ates with  other  steel  firms  in  the  "various  pools  that  prevent 
competition;  but  in  other  respects  it  is  absolutely  free  from 
entangling  alliances. 

Young  Jones  stands  out  amid  the  mob  of  Pittsburgh  super- 
intendents and  managers  as  conspicuously  as  an  elm-tree  in 
a  berry-patch.  They  do  what  they  are  told.  They  obey 
orders  from  New  York.  The  shadow  of  Morgan  obscures 
them.  But  Jones  is  the  owner  as  well  as  the  captain  of  his 
ship.  He  is  not  a  cog  in  a  vast  impersonal  mechanism.  If 
he  had  been  self-made  he  would  deserve  to  be  called  the  last 
of  the  Titans.  Although  he  is  young,  he  is  a  steel-maker  of 
the  old  school;  and  although  he  has  been  reared  as  the  son 
of  a  multimillionaire,  he  possesses  the  hardy  virtues  that 
usually  wither  in  the  midst  of  affluence.  He  has  simple  tastes 
and  works  as  hard  as  any  of  his  clerks.  "  He  is  a  chip  of  the 
old  block,"  say  Pittsburghers. 

In  fact,  the  only  real  competition  that  is  taking  place  to-day 
in  the  steel  business  is  between  the  old  style  of  corporation,  as 
represented  by  Jones  &  Laughlin,  and  the  new  style,  as  repre- 
sented by  the  United  States  Steel  Corporation.  The  latter 
is  the  popular  way — the  twentieth-century  way.  Four-fifths 
of  the  steel  companies  are  now  organised  on  the  lines  mapped 
out  by  Morgan.  But  the  Jones  &  Laughlin  company  stands 
apart  and  will  take  no  share  in  the  democratisation  of  its 
business, 

What  the  Carnegie  company  used  to  be  in  the  steel  trade 
the  Jones  &  Laughlin  firm  is  to-day.  With  its  two  immense 
steel-mills,  its  six  furnaces,  its  aggregation  of  shops  and  foun- 
dries, its  ore-mines,  docks,  coal-lands,  coke-ovens,  and  lime- 
stone-quarries, the  plant  over  which  young  Jones  presides  is 
one  of  the  most  important  factors  in  the  whole  steel  situation. 
And  there  is  an  impressive  contrast  between  the  simple  two- 
story  office-building  of  the  Jones  &  Laughlin  company — 

321 


THE   ROMANCE   OF   STEEL 

sheeted  with  iron  and  painted  white,  with  rough,  slivery 
floors,  plain  furniture,  cheap  rugs,  and  old  scraps  of  carpet 
— and  the  magnificent  Frick  and  Carnegie  buildings,  the  very 
apex  of  Pittsburgh. 

The  original  B.  F.  Jones,  who  died  four  years  ago,  gathered 
up  eighteen  millions  in  his  industrious  lifetime.  His  ances- 
tors crossed  the  Atlantic  with  William  Penn,  but  in  a  century 
and  a  half  they  had  picked  up  no  property  worth  inherting. 
His  father  kept  a  little  country  tavern;  and  when  the  son 
was  a  boy  of  eighteen  he  tramped  to  Pittsburgh  and  got  a  job 
with  a  canal-boat  company.  For  the  first  year  the  company 
gave  him  his  board,  but  no  wages.  The  third  year  he  was 
manager.  The  fourth  year  he  was  a  partner.  Then  he  looked 
ahead  and  saw  that  the  canal-boat  profits  would  be  cut  off 
by  the  railroads.  He  sold  out  and  bought  an  old  iron-furnace. 
Like  Carnegie,  he  was  wise  enough  to  join  hands  with  a 
practical  iron-maker,  Bernard  Lauth;  and  in  ten  years  they 
had  made  so  much  money  that  Lauth  retired.  A  wealthy 
pork-packer  and  banker,  James  Laughlin,  took  notice  of  the 
enterprise  of  young  Jones,  and  became  his  partner. 

CARNEGIE'S  OPINION  OF  B.  F.  JONES 

As  far  back  as  fifty  years  ago  the  Jones  iron-works  was  the 
largest  concern  of  its  kind  in  Pittsburgh.  Twenty  years  later 
the  brilliant  Carnegie,  eleven  years  younger  than  Jones  and 
eleven  inches  shorter,  plunged  into  the  scrimmage  and  scat- 
tered everybody  right  and  left.  But  the  prestige  of  B.  F. 
Jones  remained  in  many  respects  unapproachable.  Even 
Carnegie  regarded  him  with  an  esteem  that  was  almost  rever- 
ence. 

"  B.  F.  Jones  was  Carnegie's  ideal  steel-master,  even  when 
the  two  men  were  competitors,"  said  Thomas  N.  Miller, 
Carnegie's  first  partner.  "  Carnegie  had  a  high  opinion  of 

322, 


STEEL   KINGS   OF   MANY   CITIES 

the  political  sagacity  of  B.  F.  Jones,"  continued  Miller;  "  and 
I  remember  that  when  Carnegie  offered  twenty  million  dol- 
lars to  the  United  States  Government  if  it  would  give  up  the 
Philippine  Islands  he  rushed  over  to  Jones  to  get  his  approval 
and  his  co-operation." 

Jones  began  fourteen  years  before  Carnegie,  but  he  made 
only  one-fourteenth  as  many  millions.  Carnegie  had  aver- 
aged over  six  and  a  half  millions  a  year  during  his  career  as 
steel-maker.  Jones  had  averaged  three  hundred  and  twenty- 
five  thousand  dollars.  Carnegie  had  made  as  much  in  the 
last  nine  months  of  his  steel-making  as  Jones  had  accumulated 
in  fifty-five  years  of  it.  But  Carnegie  was  the  exception.  He 
was  the  only  one  of  his  class. 

Judging  by  all  ordinary  standards,  B.  F.  Jones,  Sr.,  was 
unusually  successful,  and  became  immensely  wealthy.  He 
was  a  steel-master  of  the  old-fashioned  kind — conservatively 
progressive,  non-speculative,  and  always  in  the  harness  him- 
self. The  group  of  young  Joneses  and  Laughlins  who  are 
now  in  charge  have  inherited  the  business  policy  as  well  as 
the  millions ;  and  the  great  plant,  with  its  ten  thousand  work- 
men and  its  output  of  five  thousand  tons  of  ingot  steel  a  day, 
is  one  of  the  sturdiest  and  steadiest  pillars  that  stand  beneath 
the  industrial  supremacy  of  the  United  States. 

The  third  " steel  city"  in  the  United  States  is  Philadelphia. 
Here  is  the  home  of  the  American  Iron  and  Steel  Association. 
Philadelphia  is  represented  in  the  Steel  Trust  by  its  street- 
car king,  P.  A.  B.  Widener.  Also,  it  is  the  headquarters  of 
seven  independent  iron  and  steel  companies  whose  stock  has 
a  face  value  of  one  hundred  and  twelve  million  dollars. 

The  "big  two"  of  these  companies  are  the  Cambria  and 
the  Pennsylvania — capitalised  at  fifty  millions  each,  and  both 
controlled  by  the  Pennsylvania  Railroad.  "  Those  two  com- 
panies are  in  good  condition,  and  both  will  have  a  great 
future,"  said  one  of  the  foremost  directors  of  the  United 

323 


THE   ROMANCE   OF   STEEL 

States  Steel  Corporation  when  I  requested  him  to  pick  out 
the  winners  from  among  the  independents.  Each  has  as  its 
president  a  relative  of  the  original  founder. 

The  famous  old  Cambria  still  gives  employment  to  the 
men  of  Johnstown,  having  survived  the  flood  and  the  financial 
vicissitudes  of  sixty  years.  It  was  Daniel  J.  Morrell,  a  Quaker 
merchant  of  Philadelphia,  who  made  Cambria  great,  in  the 
days  of  the  Civil  War  and  afterward.  It  was  he  who  made 
that  famous  answer  when  he  was  asked  the  secret  of  Cam- 
bria's success. 

"We  always  try  to  beat  our  last  batch  of  rails,"  he  said. 
"That  is  all  the  secret  we've  got,  and  we  don't  care  who 
knows  it."  To-day,  under  the  presidency  of  Powell  Stack- 
house,  Cambria  employs  fourteen  thousand  men,  and  is  mak- 
ing profits  of  four  millions  a  year. 

The  Pennsylvania  company  is  a  most  elaborate  concern, 
It  can  make  all  sorts  of  things,  from  an  ocean  steamship  to  a 
rivet — from  a  bridge  to  a  railway  signal.  In  fact,  it  has  built 
as  many  as  seven  big  ships  at  one  time  in  its  Maryland  ship- 
yards. It  is  also  unique  in  this  respect,  that  its  ore  mines  are 
scattered  over  three  continents — Europe,  Africa,  and  Amer- 
ica. In  two  other  respects,  also,  it  is  a  notable  company: 
it  owns  the  historic  iron-mines  of  Cornwall,  in  Pennsylvania, 
and  the  oldest  active  Bessemer  plant  in  America,  at  Steelton. 

THE    MAKING    OF   SAWS 

In  Philadelphia  we  find  the  monster  saw-works  of  Henry 
Disston  &  Sons.  As  this  company  has  made  its  own  steel  for 
half  a  century,  it  deserves  a  place  in  this  story.  At  Disston's 
the  skill  of  the  steel-maker  is  at  its  best.  Here  the  wondering 
visitor  can  see  steel  rolled  and  scissored  into  long  flexible  rib- 
bons, as  though  it  were  a  woven  fabric.  Here  all  manner 
of  extraordinary  saws  are  made — saws  with  diamond  teeth, 

324 


PETER    A.    B.    WIDENER 


OFTHE 

UNIVERSITY 

OF 


STEEL   KINGS   OF  MANY  CITIES 

saws  that  are  twice  as  long  as  telegraph-poles — half  a  million 
saws  of  all  sorts  being  regarded  as  a  good  year's  work. 

As  usual,  we  find  back  of  the  Disston  success  a  heroic  story 
of  self-help.  The  first  Disston  began  to  make  saws  in  a  base- 
ment, in  the  days  of  Andrew  Jackson  and  Van  Buren.  For 
twenty-one  years  he  wrestled  with  English  competitors. 
Then  came  the  Morrill  tariff  of  1861,  and  his  business  shot 
ahead  until  it  became  one  of  the  main  supports  of  the  indus- 
trial greatness  of  Philadelphia. 

There  are  still  three  other  iron  enterprises  in  the  Quaker 
City — the  Allegheny  Ore  and  Iron,  which  is  fortunate  in 
owning  the  famous  Oriskany  mine,  in  Virginia;  the  Alan 
Wood  Iron  and  Steel,  established  more  than  eighty  years  ago; 
and  the  Phoenix  Iron,  which  has  kept  its  furnaces  ablaze  for 
a  century  or  more.  Moreover,  Philadelphia  is  the  home  of 
Joseph  Wharton,  the  present  president  of  the  American  Iron 
and  Steel  Association. 

Joseph  Wharton,  an  old-fashioned  Quaker,  is  now  a  vet- 
eran of  eighty.  He  is  a  maker  of  iron,  not  steel — the  chief 
individual  maker  of  iron  in  the  United  States.  His  four  New 
Jersey  furnaces  and  his  various  railroad  interests  have  given 
him  a  fortune  of  fifteen  million  dollars.  Like  Carnegie,  Mr. 
Wharton  is  a  man  of  varied  accomplishments :  he  has  been  the 
friend  and  adviser  of  half  a  dozen  Republican  Presidents — 
a  publicist  for  two  generations — an  educator — a  writer — a 
poet.  Who  can  say  that  the  men  of  steel  are  not  also  men  of 
romance,  when  they  have  elected  as  their  official  head  the 
only  one  of  their  number  whose  lips  have  been  touched  with 
the  divine  fire? 

In  the  smaller  "iron  city"  of  Reading  there  are  at  least 
two  companies  that  compel  our  attention.  The  first  is  a  twenty- 
million  concern  called  by  the  ambitious  name  of  the  Amer- 
ican Iron  and  Steel  Manufacturing  Company,  which  produces 
nuts,  bolts,  rivets,  and  the  like.  At  its  head  is  J.  H.  Stern- 

325 


THE  ROMANCE  OF  STEEL 

bergh,  a  veteran  who  has  won  the  right  to  be  calle'd  the 
founder  of  the  bolt  and  nut  business  in  this  country. 

Sternbergh  is  a  notable  man.  At  the  close  of  the  Civil 
War  he  was  a  railway  clerk.  He  knew  nothing  whatever  of 
the  iron  trade;  he  was  not  a  mechanic;  but  he  saw  the  need 
of  nuts  and  bolts,  set  his  brain  to  work,  and  invented  the 
necessary  machinery  and  began  to  make  them.  "  As  a  result," 
he  said,  "  I  have  seen  the  price  of  square  nuts  cut  down  from 
eleven  to  two  cents  a  pound." 

The  second  concern  is  the  Reading  Iron  Company,  which 
was  put  on  its  feet  by  the  backing  of  George  F.  Baer,  whom 
the  Coal  Trust  made  famous.  This  enterprise  is  unique  in 
two  respects.  In  the  first  place,  its  assets  are  said  to  be  twelve 
times  greater  than  the  face  value  of  its  stock;  and  in  the 
second  place,  it  has  adopted  the  novel  plan  of  buying  a  heavy 
interest  in  an  outside  steel  company  instead  of  building  any 
steel-mills  of  its  own.  It  holds  at  the  present  time  over  sixty 
thousand  shares  of  the  Pennsylvania  Steel. 

Among  the  miscellaneous  steel-making  corporations  which 
cannot  be  classed  under  any  general  head,  the  largest  is  the 
International  Harvester  Company,  which  probably  does  more 
business  with  all  parts  of  the  civilised  world  than  any  other 
corporation  in  Chicago.  Merely  for  its  own  use,  it  produces 
over  two  hundred  thousand  tons  of  iron  in  an  average  year, 
and  also  operates  a  couple  of  big  steel-mills.  There  is  also 
the  Crucible  Steel — one  of  Pittsburgh's  fifty-million  com- 
panies. After  a  somewhat  erratic  career,  it  seems  now  to  have 
become  well  established  under  the  presidency  of  William  G. 
Park. 

The  youngest,  but  in  some  respects  the  greatest,  of  all  the 
steel-works  is  the  immense  new  plant  of  the  Lackawanna 
Steel  Company,  at  Buffalo.  This  has  grown  into  maturity 
so  quickly  that  few  realise  its  important  place  in  the  steel 
world.  Six  years  ago  the  swamps  around  Stony  Point,  several 

326 


STEEL   KINGS   OF   MANY   CITIES 

miles  out  of  Buffalo,  were  a  favourite  hunting-ground  for 
sportsmen,  who  waded  about  in  search  of  rail  and  coot,  and 
now  and  then  a  duck.  To-day  on  these  swamps  stands  a  steel 
city  of  thirty-five  thousand  people  and  a  plant  covering  three 
times  more  ground  than  the  Pan-American  Exposition. 

As  far  back  as  1817  there  were  iron-workers  in  Buffalo. 
In  that  year  the  famous  steamboat  Walk-in-the-Water  was 
built  at  Buffalo,  engine  and  all.  It  was  the  engine,  mainly, 
that  became  famous,  because  of  its  constant  surrenders  to  wind 
and  tide.  When  the  boat  was  launched  the  current  of  Niag- 
ara River  was  too  strong  for  the  engine,  and  the  captain 
was  obliged  to  rig  up  several  sails  and  hire  a  dozen  oxen 
before  he  could  get  his  craft  into  the  lake.  Edward  Roat 
built  the  first  Buffalo  foundry,  and  by  the  time  of  the  Civil 
War  there  were  twenty  small  iron-works  in  the  city.  The 
panic  of  1873  pushed  most  of  these  concerns  into  bankruptcy, 
and  little  was  done  for  twenty  years. 

BUFFALO   AS    A    STEEL    CENTRE 

No  steel  had  been  made  in  Buffalo  until  the  Lackawanna 
works  started  its  fires.  Then  the  rail  pool  gave  it  an  allot- 
ment of  fifteen  per  cent,  of  all  the  rails  produced.  Its  annual 
output  of  six  hundred  and  fifty  thousand  tons  of  rails  would 
be  enough  to  lay  a  double  track  between  Buffalo  and  New 
York  City.  A  yearly  product  of  one  million  two  hundred 
and  fifty  thousand  tons  of  iron  and  steel  is  the  present  record 
of  this  wonderful  two-year-old  steel-mill. 

In  several  particulars  the  Lackawanna  plant  beats  anything 
at  Pittsburgh  or  in  Europe.  Four  of  its  furnaces  are  the 
largest  ever  built,  and  its  forty-two-thousand-horse-power  gas- 
engines  are  in  a  class  by  themselves.  The  entire  equipment 
is  on  a  magnificent  scale.  Here  are  a  coal-trestle  a  mile  in 
length,  a  rail-mill  one  thousand  seven  hundred  and  sixty-two 

327 


THE   ROMANCE   OF   STEEL 

feet  from  end  to  end,  a  three-quarter-mile  ore-dock,  and  a 
one-mile  ship-canal.  The  coke  is  carried  through  a  tunnel 
from  the  harbour  to  the  furnaces. 

Immense  machines,  for  which  almost  the  price  of  a  sky- 
scraper has  been  paid,  tower  in  the  workshops.  In  the  sub- 
ways are  steel  tubes  through  which  a  team  of  horses  might 
be  driven.  Cranes  that  can  easily  pick  up  a  locomotive  swing 
back  and  forth.  A  full  hour  is  required  to  walk  from  one 
end  of  the  Titanic  plant  to  the  other.  The  company  owns 
thirty-five  miles  of  railroad,  and  connects  with  twenty-seven 
railway  systems. 

This  single  plant  is  the  best  illustration  of  the  fact  that  the 
steel  business  is  to-day  one  for  multimillionaires  only.  To 
equip  it  has  required  forty  million  dollars.  Some  single  items, 
such  as  the  ore-dock,  ship-canal,  gas-engines,  and  harbour, 
cost  a  million  dollars  apiece.  Hundreds  of  four-room  brick 
cottages  had  to  be  built  for  its  seven  thousand  workmen.  For 
every  dollar  of  capital  that  was  needed  before  the  Civil  War 
a  hundred  dollars  is  necessary  to-day. 

THE    MOVEMENT   TO   THE    LAKES 

A  significant  fact  about  the  Lackawanna  works  is  that  it 
indicates  a  movement  to  the  Lakes.  It  was  originally  built 
at  Scranton,  but  two  years  ago  the  Scranton  plant  was  aban- 
doned and  the  whole  force  of  men  moved  to  Buffalo.  Su- 
periority in  transportation  facilities  is  the  main  reason  given 
for  the  change.  Buffalo  iron-makers  claim  that  iron  can  be 
made  in  their  city  for  one  dollar  and  thirty-seven  cents  per 
ton  less  than  in  Pittsburgh. 

The  builder  of  this  great  steel-making  and  millionaire- 
making  workshop  is  a  thick-set,  bushy-whiskered  German- 
American — Henry  Wehrum.  He  is  the  Captain  Jones  of 
Buffalo.  He  has  a  natural  aptitude  for  leadership  over  large 

328 


STEEL    KINGS   OF   MANY   CITIES 

bodies  of  workmen.  "Why,"  said  one  of  the  men,  "if  the 
old  man  said  to  us,  '  Come  along,  boys,  I'm  going  to  build  a 
steel  plant  in  Alaska,'  we'd  pull  up  stakes  and  follow  him." 
Walter  Scranton  and  S.  B.  Sheldon  are  the  captain  and  first 
mate  of  the  big  concern.  The  latter  is  a  powerful  young  man 
of  electric  force  and  alertness.  His  manner  is  genial,  but 
every  word  comes  out  like  the  crack  of  a  whip.  Among  the 
men  who  have  staked  forty  millions  on  the  success  of  the 
enterprise  are  such  well-known  financiers  as  D.  O.  Mills, 
Moses  Taylor,  C.  Ledyard  Blair,  Adrian  Iselin,  Jr.,  H. 
McK.  Twombly,  Robert  B.  Van  Cortlandt,  and  Cornelius 
Vanderbilt. 

These  capitalists  are  very  rich — too  rich,  says  Pittsburgh. 
"  The  Lackawanna  plant  was  built  at  an  enormous  cost,"  said 
one  of  the  Pittsburgh  steel  kings.  "  It  was  a  case  of  having 
too  much  money.  The  men  who  backed  it  thought  that  they 
would  escape  the  heavy  fixed  charges  of  the  United  States 
Steel,  but  they  forgot  a  number  of  other  factors.  They  were 
new  men  in  the  iron  and  steel  world,  and  they  are  learning 
a  few  things  that  Pittsburgh  could  have  told  them.  Their 
first  mistake  was  in  pulling  down  their  old  plant  at  Scranton 
before  the  new  one  was  in  working  order.  They  have  money 
enough,  of  course,  to  buy  success  in  the  end.  But  they  will 
have  to  pay  a  higher  price  than  they  imagined." 

The  Lackawanna  officials  realise  that  they  are  still  "  under 
the  head  of  unfinished  business."  "We  can't  give  out  any- 
thing now,"  said  its  secretary.  "Wait  until  we  get  shaken 
down  and  know  where  we're  at."  Its  first  annual  report,  how- 
ever, issued  last  March,  tells  of  success.  The  total  earnings 
were  twenty-nine  millions,  and  net  profits  of  two  millions. 
Its  president  is  E.  A.  S.  Clarke,  who  was  graduated  from 
Harvard  twenty-two  years  ago  and  learned  to  make  steel  under 
Robert  Forsythe,  in  Chicago. 

Perhaps  the  most  absolutely  independent  of  American  steel 

329 


THE   ROMANCE   OF   STEEL 

cities  is  Bethlehem,  which  straggles  along  the  hilly  banks  of 
the  Lehigh  River,  in  eastern  Pennsylvania.  Its  magnificent 
steel-mills  and  armour-plate  works  are  controlled  by  one  indi- 
vidual— Charles  M.  Schwab.  And  in  the  development  of  its 
big  plans  for  the  future  Bethlehem  appears  to  be  driving 
ahead  without  any  entangling  alliance  with  other  cities. 

Bethlehem  was  created  by  the  brains  of  John  Fritz  and  the 
money  of  Joseph  Wharton.  John  Fritz,  who  is  still  living, 
at  the  age  of  eighty-five,  and  who  may  worthily  be  called  the 
dean  of  all  steel  men,  achieved  the  most  notable  triumphs  of 
his  life  at  Bethlehem.  He  built  up  a  tiny  rail-mill  until  he 
had  made  one  of  the  most  elaborate  steel  plants  in  the  world. 

Since  W.  C.  Whitney,  then  Secretary  of  the  Navy,  requested 
it  to  make  guns  and  armour-plate  for  Uncle  Sam,  Bethlehem 
has  generally  been  regarded  as  mainly  a  military  plant.  It 
is  a  place  where  cannons  have  been  made  strong  enough  to 
hurl  death  a  distance  of  twenty  miles — or  fast  enough  to  fire 
a  dozen  times  a  minute.  All  this  is  still  true.  But  the  im- 
provements that  are  now  being  pushed  forward  will  give 
Bethlehem  an  equally  wide  reputation  for  the  making  of 
cars  and  structural  steel.  The  superb  equipment  of  the  Beth- 
lehem plant  has  made  it  one  of  the  best  money-makers.  In 
the  last  four  years,  for  instance,  the  profits  have  been  twelve 
millions. 

The  best  located  steel  plant,  perhaps,  either  in  the  United 
States  or  anywhere  else,  is  the  new  one  that  has  been  built  by 
Milliken  Brothers  on  Staten  Island.  Although  it  employs  two 
thousand  men  and  covers  two  hundred  acres,  it  lies  inside  the 
fence  of  Greater  New  York.  It  has  been  constructed  so  quietly 
and  quickly  that  very  few  in  the  Empire  City  are  aware  of 
its  existence. 

With  the  exception  of  two  small  structural  mills  in  Eng- 
land, it  is  the  only  one  in  the  world  that  can  load  an  ocean 
steamship  in  its  front  yard.  The  Millikens  can  make  nearly 

330 


STEEL   KINGS   OF   MANY  CITIES 

two  hundred  thousand  tons  of  open-hearth  steel  in  a  year, 
which  they  shape  into  structural  material  for  skyscrapers  and 
bridges.  At  the  head  of  this  promising  enterprise  stands  a 
keen  and  energetic  young  graduate  of  Yale — Foster  Milliken, 
one  of  the  coming  men  of  the  steel  industry. 

"TOM"  JOHNSON  AND  MARK  HANNA 

Two  forceful  Americans  who  made  their  mark  in  iron  and 
steel,  as  well  as  in  several  other  things,  are  Mayor  "  Tom  " 
Johnson  of  Cleveland,  and  the  late  Senator  Mark  Hanna. 
Mayor  Johnson — "  a  reformed  business  man,"  as  he  has  been 
called — first  came  to  public  notice  in  the  street-railway  world 
when  he  was  twenty-one.  He  invented  a  new  kind  of  rail 
for  street-railways,  and  made  a  fortune  before  anyone  else 
could  follow  his  lead.  Perhaps  the  most  unique  act  of  his  life, 
during  his  steel-making  career,  was  when  he  arose  in  Congress 
and  electrified  its  members  by  moving  that  the  duty  on  steel 
rails  be  removed. 

:<  But  is  it  not  true  that  the  member  himself  is  a  maker  of 
steel  rails  and  a  beneficiary  of  the  tariff?"  asked  Dalzell,  the 
member  from  Pittsburgh. 

"  Yes,  I  am  a  maker  of  steel  rails,"  replied  Johnson.  "  I 
get  a  higher  price  for  my  rails  because  of  the  duty.  But  when 
I  stand  here  as  a  member  of  Congress,  I  do  not  represent 
myself,  nor  my  steel-mill.  I  represent  the  men  whose  votes 
put  me  where  I  am.  They  voted  for  free  trade  when  thy 
voted  for  me,  and  therefore  I  move  that  rails  be  put  on  the 
free  list." 

Senator  Hanna  saw  millions  in  iron  soon  after  the  Civil 
War,  when  he  was  working  as  a  poorly  paid  clerk  on  a  Lake 
Superior  vessel.  His  marriage  to  Miss  Rhodes,  daughter  of 
"  Old  Dan  Rhodes,"  a  coal  and  iron  pioneer,  gave  him  a  start. 
Soon  there  were  dozens  of  vessels  in  the  Hanna  fleet,  and 

33i 


THE   ROMANCE   OF   STEEL 

he  was  carrying  more  ore  through  the  "  Soo  "  Canal  than  an; 
other  shipowner.  Then  he  bought  mines  and  built  furnaces 
One  thing  suggested  another.  He  raked  in  coal-lands,  oil 
lands  and  wells,  a  stove  company,  street-railways,  banks, 
newspaper,  a  theatre.  From  the  top  of  this  heterogeneou 
pyramid  of  possessions  he  climbed  still  higher  into  fame  b; 
becoming  the  harmoniser  of  labour  and  capital — a  maker  o 
Presidents — and  possibly  for  a  time  the  most  influential  mai 
in  American  public  life. 


MRS.    KELLEY,   IRON-MAKER 

There  is  only  one  woman  in  the  American  iron  and  stee 
trade — Mrs.  Nannie  H.  Kelley,  of  Ironton,  Ohio.  She  i 
the  sole  proprietor  and  manager  of  a  charcoal-furnace  tha 
makes  about  one  hundred  thousand  dollars'  worth  of  iron 
year.  After  the  slump  of  1893,  Mrs.  Kelley  bought  the  fur 
nace  and  ten  thousand  acres  of  ore-lands  for  a  fifth  of  its  value 
and  for  the  past  eight  years  she  has  made  it  pay  handsome  divi 
dends.  Mrs.  Kelley  is  not  a  widow.  Her  husband  was  ; 
prominent  business  man  and  State  Senator  until  recenth 
when  he  retired  from  active  work.  Mrs.  Kelley  is  a  womai 
of  force  and  enterprise,  who  is  in  business  life  from  choice 
not  necessity. 

"  Everything  she  touches  turns  to  gold,"  says  one  of  he 
neighbours.  Every  one  in  Ironton  respects  her  judgment  ii 
financial  affairs.  She  knows  her  workmen  by  name,  and  ha 
never  had  a  strike.  And  she  has  never  allowed  her  work  a 
a  furnace-manager  to  interfere  with  her  other  duties  as  ; 
wife,  a  mother,  and  an  entertainer.  In  short,  Mrs.  Kelley  i 
a  highly  creditable  member  of  the  guild  of  iron  and  steel. 

And  now  there  remains  only  one  more  of  the  thousand  mil 
lionaires  of  steel — James  J.  Hill,  who,  with  his  associates 
will  soon  be  drawing  from  the  Steel  Trust  a  pension  greate: 

332 


STEEL    KINGS   OF   MANY  CITIES 

than  that  of  Andrew  Carnegie.  Hill  has  never  been  any- 
thing but  a  railway  man.  He  has  never  made  a  pound  of 
iron  or  steel  in  his  life.  Yet  he  has  recently  completed  a 
lease  of  ore-lands  which  is  the  largest  single  transaction  in  the 
whole  history  of  the  iron  business. 

"  It  is  the  greatest  deal  in  iron  that  the  world  has  ever 
known,"  said  Mr.  Hill  complacently.  "  If  the  ore  lasts  for 
fifty  years,  as  I  expect,  the  total  sum  realised  will  be  one  and 
Dne-half  billion  dollars.  This  vast  sum  will  not  come  to  me 
ar  my  heirs,  but  to  the  stockholders  of  the  Great  Northern. 
As  I  hold  seven  per  cent,  of  the  stock,  I  shall  profit  to  that 


extent." 


Roughly  speaking,  the  bargain  is  that  the  Steel  Trust  shall 
dig  not  less  than  a  specified  amount  of  ore  each  year,  paying 
3ne  dollar  and  sixty-five  cents  a  ton  for  royalty  and  freight. 
Each  year  the  royalty  and  the  amount  of  ore  are  to  increase, 
until,  in  1917,  the  owners  of  the  land  will  be  receiving  the 
stupendous  total  of  more  than  fifteen  million  dollars  a  year. 
By  this  one  deal  a  new  batch  of  a  thousand  millionaires  will 
be  created.  Such  is  the  increasing  affluence  of  the  world  of 
steel. 

THE   ORE   DEAL 

Eight  years  ago  Hill  bought  the  Duluth,  Superior,  and 
Western  Railroad.  When  he  saw  the  possibilities  of  profit  in 
hauling  ore  he  began  a  buying  campaign,  gathering  in  any  old 
rights  of  way,  timber  railways,  or  ore-lands.  For  a  time  he 
md  Rockefeller  ran  a  neck-and-neck  race  for  supremacy  in 
the  ore  regions.  Both  bought  land  and  built  railroads.  But 
there  was  one  important  difference  in  their  tactics — a  differ- 
ence which  prevented  the  ore  region  from  passing  altogether 
into  the  hands  of  these  two  men.  Rockefeller  operated  his  own 
mines  and  discouraged  all  smaller  operators  by  prohibitive 
rates.  Hill,  on  the  contrary,  adhered  to  his  lifelong  policy 

333 


THE   ROMANCE   OF   STEEL 

of  being  strictly  a  railroad  man.  He  leased  his  mines  to  other 
operators  and  stimulated  the  mining  business.  He  even  lent: 
money  to  men  who  lacked  the  capital  to  become  operators. 

"  The  Northern  Pacific  acquired  its  ore-lands  to  secure  the 
freightage,  and  for  no  other  reason,"  said  its  second  vice-presi- 
dent, whom  I  interviewed  in  his  office  at  St.  Paul.  "  We  have 
never  made  a  dollar  by  speculating  in  ore-lands,"  the  official 
continued.  "  Neither  was  there  any  likelihood  at  any  time  of 
our  operating  the  mines  or  entering  the  iron  and  steel  business. 
All  that  we  wanted  was  the  haul." 

As  the  United  States  Steel  Corporation  owns  a  railroad  that 
runs  parallel  with  Hill's  in  the  ore  country,  and  as  his  present 
ore  traffic  comes  mainly  from  the  independent  operators,  it 
seemed  most  likely  that  he  would  favour  leasing  his  ore-lands 
to  the  independents.  This  opinion  was  still  further  strength- 
ened by  the  fact  that  Hill  on  one  occasion  rebuffed  the  United 
States  Steel  president  when  the  latter  proposed  to  buy  the 
Hill  properties.  The  story  was  told  to  me  by  one  of  the  chief 
steel  kings  of  Cleveland.  It  appears  that  when  Schwab  was 
in  the  first  flush  of  his  presidential  enthusiasm  he  declared  in 
a  public  speech :  "  The  United  States  Steel  Corporation  owns 
six  hundred  million  tons  of  iron  ore.  This  is  worth  at  least 
a  dollar  a  ton  in  the  ground.  The  ore  alone,  therefore,  is  an. 
asset  worth  three-fifths  of  a  billion."  Shortly  afterward, 
Schwab  ran  across  Broadway  to  Hill's  office  and  asked: 
"  What  price  would  you  charge  us  for  your  ore  in  case  we 
should  decide  to  take  it  over?  " 

"  You  can  have  it  at  your  own  valuation,"  replied  Hill, 
with  an  amiable  smile — "  a  dollar  a  ton  in  the  ground." 

"Absurd!"  exclaimed  Schwab,  dropping  the  proposition 
like  a  hot  potato. 

The  ore  of  Minnesota  is  now  entirely  in  the  possession  of 
the  iron  and  steel  companies,  with  the  exception  of  several 
tracts  that  were  given  years  ago  to  the  schools.  If  the  people 

334 


STEEL    KINGS   OF   MANY   CITIES 

of  that  State  had  not  given  away  their  iron  ore  they  might  now 
be  drawing  dividends  of  twenty-five  million  dollars  a  year — 
sixty  dollars  or  more  per  family.  Nature  gave  Minnesota 
three  thousand  million  dollars'  worth  of  red  ore,  yet  in  a 
single  generation  a  handful  of  outsiders  have  rushed  in  and 
practically  taken  possession  of  it  all. 

Big  and  little,  all  the  iron  and  steel  corporations  seem  to 
live  as  happily  together  as  a  basket  of  kittens.  They  have 
adopted  the  Morgan  principle  of  "  community  of  interest." 
Two-thirds  of  them  have  organised  openly  and  called  them- 
selves the  United  States  Steel  Corporation,  and  practically  all 
of  them  are  linked  together  in  pools  as  well  as  in  the  growing 
communism  of  capital.  The  steel  millionaires  are  not  now  a 
class  by  themselves.  Men  of  all  trades  and  professions  are  in 
steel,  and  steel  men  are  distributing  their  money  in  other  en- 
terprises. 

There  are  about  sixty  thousand  people  who  have  more 
or  less  money  invested  in  iron  and  steel.  Ten  years  ago  a 
handful  of  picturesque  Titans  were  in  control.  To-day,  the 
steel  trade  is  national.  It  is  semi-social.  It  could  be  completely 
consolidated  and  made  a  department  of  the  Federal  Govern- 
ment without  as  much  work  as  Morgan  performed  in  1901. 

Roughly  speaking,  the  capitalisation  of  the  United  States 
Steel  Corporation  is  one  and  a  half  billions,  and  that  of  all 
the  independent  iron  and  steel  companies,  half  a  billion.  Take 
it  at  its  face  value,  and  our  American  iron  and  steel  business 
is  worth  two  billion  dollars.  Allow  seven  per  cent,  profit  on 
this  valuation,  and  in  seven  years  the  steel  trade  can  give  nearly 
a  million  dollars  apiece  to  a  thousand  men. 

All  told,  there  are  eighteen  important  independent  com- 
panies capitalised  at  from  five  to  sixty  millions.  Five  com- 
panies, with  one  hundred  and  eighty  millions  dollars  capital, 
are  managed  from  New  York  City.  Three,  with  one  hundred 
millions^  are  Philadelphians.  Two,  with  one  hundred  and 

335 


THE   ROMANCE   OF   STEEL 


thirty-five  millions,  are  Pittsburghers.  The  real  steel  capital 
of  to-day  is  therefore  not  Pittsburgh,  but  New  York,  which 
controls  eighty-five  per  cent,  of  the  entire  business.  Of  the  re- 
maining fifteen  per  cent,  nearly  all  is  controlled  in  the  three 
cities  of  Philadelphia,  Pittsburgh,  and  Chicago.  The  small 
independent  iron-and-steel  making  communities  have  been 
almost  absolutely  wiped  out;  in  proportion  to  the  total  volume 
of  trade,  they  are  practically  extinct.  This  is  the  day  of  big 
things. 

A   GAME   FOR    MILLIONAIRES 

The  American  steel  trade  has  become  a  game  for  million- 
aires only.  Even  they — even  the  money  kings — must  associate 
before  they  dare  to  make  steel.  Six  centuries  ago,  steel  was  a 
royal  metal.  It  was  made  and  used  only  by  kings.  To-day, 
steel  is  used  by  every  man,  woman,  and  child  in  the  United 
States;  but  it  is  made  only  by  those  who  are  royal  in  the  new 
commercial  sense.  In  the  spiral  of  industrial  evolution  it  has 
become  again  a  metal  of  kings. 

"  No  steel  concern  can  compete  with  the  United  States 
Steel  Corporation  unless  it  owns  its  raw  materials  and  can 
make  from  two  thousand  to  two  thousand  five  hundred  tons  a 
day — a  plant  that  would  cost  from  twenty  to  thirty  millions," 
said  Willis  L.  King,  vice-president  of  the  Jones  &  Laughlin 
Company.  Taking  twenty  millions  as  the  minimum,  we  find 
no  more  than  a  dozen  companies  that  may  confidently  hope 
for  a  continued  existence.  The  others,  says  this  veteran  steel- 
maker, must  fall  out  of  the  race. 

The  famous  Lynn  iron-works  of  a  century  and  a  half  ago 
was  built  for  five  thousand  dollars.  Queen  Anne's  blast-fur- 
nace in  Virginia  cost  her  sixty  thousand  dollars.  Baron  Stie- 
gel's  renowned  glass  and  iron  plant,  castle  and  all,  was  built 
for  the  one-hundredth  part  of  twenty  millions.  And  when 
Carnegie  first  got  his  standing  as  an  iron  capitalist  he  brought 

336 


FOSTER    MILLIKEN 


STEEL   KINGS   OF   MANY   CITIES 

only  six  thousand  five  hundred  dollars  in  his  hand.  To-day, 
the  small  men  are  walled  out.  Even  at  the  mines  they  are 
excluded.  The  entire  Lake  Superior  region  is  in  the  hands  of 
a  few  operators.  A  crane  for  moving  ore  costs  as  much  as  a 
whole  iron-works  could  be  built  for  fifty  years  ago. 

"  A  single  blast-furnace,  making  one  hundred  and  fifty  thou- 
sand tons  a  year,  cannot  be  built  now  for  less  than  a  million 
dollars,"  said  James  Gayley,  the  "  pig  iron  king "  of  the 
United  States  Steel  Corporation,  when  I  asked  his  opinion  as 
the  ablest  expert  on  the  question  of  cost. 

At  that  greatest  of  battles,  Mukden,  the  Japanese  army  ad- 
vanced in  the  form  of  a  vast  crescent,  ninety  miles  long.  Be- 
hinds  its  center  stood  Oyama,  flashing  his  orders  by  telephone 
to  every  part  of  his  "  far-flung  battle-line."  Such  are  the  new 
tactics  of  the  modern  generals — guns  that  shoot  farther  than 
the  eye  can  see,  messages  that  can  be  sent  without  even  the 
makeshift  of  a  wire,  explosives  that  shatter  stone  walls  into 
dust!  What  would  a  resurrected  Caesar  think  of  these  mir- 
acles? What  would  be  the  amazement  of  a  Charlemagne  or 
even  a  Napoleon?  Yet,  wonderful  as  this  military  progress 
has  been,  it  has  not  been  as  revolutionary  as  the  changes  that 
have  taken  place  in  the  making  of  steel.  "  Even  Captain  Bill 
Jones  would  rub  his  eyes,"  said  several  steel-makers,  "  if  he 
could  see  some  of  the  machinery  that  we  use  now." 


337 


CHAPTER  XII 
THE  FUTURE  OF  STEEL" 

Opinions  as  to  the  Direction  of  Future  Development — The  Vastness  of  the 
Industry  To-day,  and  Its  Expansion  through  the  Discovery  of  New  Uses 
for  Its  Product — Cities  that  May  Become  Capitals  of  Steel — The  Battle 
Against  Conservatism. 

WITH  this  chapter  the  long  "  story  of  a  thousand 
millionaires  "  comes  to  an  end.  It  can  now  be  seen 
that  it  was  no  idle  boast  to  claim  a  thousand  million- 
aires for  the  American  iron  and  steel  trade.  As  a  matter  of 
fact,  there  was  enough  new  money  made  in  steel  last  year  to 
give  two  hundred  and  fifty  men  a  million  dollars  apiece.  And 
at  the  present  unparalleled  rate  of  speed,  we  could  very  nearly 
produce  a  thousand  Steel  Kings  in  a  thousand  days. 

Now  that  we  are  making  enough  iron  in  one  year  to  give 
thirty-seven  pounds  to  every  man,  woman  and  child  in  the 
world,  it  would  seem  as  though  the  limit  of  growth  had  been 
reached.  But  the  men  of  iron  and  steel  say  that  the  to-mor- 
rows will  beat  the  yesterdays.  There  will  be  no  halt,  they  say, 
in  the  steady  procession  of  improvements. 

We  have  seen  how  a  great  business  grows ;  how  it  enriches 
those  who  are  loyal  to  it;  how  it  builds  cities,  creates  new  in- 
dustries, and  pushes  forward  the  progress  of  civilisation.  And 
now  the  final  question  is,  what  about  the  future  of  the  Ameri- 
can steel  trade? 

On  this  subject  there  are  bulls  and  bears,  as  Wall  Street 
would  say.  There  are  some  who  think  that  the  steel  business 
has  been  overstimulated  and  overcapitalised — that  the  great 
corporations  will  fall  apart  because  of  their  size  and  their 

338 


THE    FUTURE   OF    STEEL 

monopolistic  nature.  "  Modern  directorship  is  too  irrespon- 
sible," say  these  men.  "  Directors  do  not  direct.  They  watch 
the  price  of  stocks  and  forget  the  making  of  steel.  After  this 
stock-company  phase  of  our  industrial  evolution  is  ended, 
we  shall  go  back  again  to  one-man  ownership  and  free  com- 
petition." 

Others — the  large  majority — think  that  the  present  situation 
is  satisfactory  and  likely  to  continue  for  a  long  time.  "  There 
is  enough  of  the  trade  organised  to  give  stability,"  they  say, 
"  but  not  enough  to  create  a  monopoly.  To  go  back  to  one- 
man  plants  is  impossible,  because  of  the  competitive  pressure 
that  would  destroy  profits.  And  complete  consolidation  is  not 
advisable,  in  spite  of  its  economies,  because  it  would  put  the 
whole  trade  into  the  power  of  a  single  bureaucracy." 

A  third  opinion — the  most  optimistic  of  all,  is  that  of  Car- 
negie. None  but  he  is  so  idealistic.  His  dream  is  of  a  na- 
tional, non-governmental,  co-operative  steel  business,  "  with 
every  workingman  a  capitalist  and  every  capitalist  a  working- 
man."  He  describes  this  communism  of  labour  as  "  the  only 
safe  system  "— "  a  splendid  vista." 

A  fourth  possibility  was  suggested  seriously  by  one  of  the 
Buffalo  steel  barons.  "  Carnegie  is  out  of  the  steel  business," 
he  said,  "  but  his  millions  are  not.  Suppose  his  heirs  should 
take  their  income  of  fifteen  millions  a  year  and  invest  it  in 
United  States  Steel  stock  whenever  there  was  a  slump  in  the 
price,  how  long  would  it  take  them  to  get  control  of  the  big 
corporation?  Carnegie  holds  a  first  mortgage  on  the  Steel 
Trust  for  one-third  of  its  value,  and  it  is  not  to  be  expected 
that  the  immense  Carnegie  fortune  can  be  pushed  easily  out  of 
the  steel  trade." 

With  regard  to  these  varying  opinions,  the  facts  show,  in 
the  first  place,  that  the  greatest  glory  of  the  Steel  Age  is  yet 
to  come.  We  have  climbed  to  a  place  where  the  American 
steel  man  says,  "  The  world  is  my  market."  We  produce 

339 


THE   ROMANCE   OF   STEEL 

nearly  half  the  steel  of  the  world.  We  are  selling  other 
nations  a  hundred  millions'  worth  a  year,  in  spite  of  their 
cheaper  labour.  We  have  swept  to  the  front  with  such  gigantic 
strides  that  no  other  country  has  to-day  any  hopes  of  becom- 
ing our  equal.  Germany,  which  is  far  ahead  of  foreign 
nations,  is  plodding  along  where  we  were  eight  years 
ago. 

THE  WONDERS  OF  STEEL 

To  sum  up  once  more  the  wonders  of  American  steel  magic, 
let  me  give  a  few  final  illustrations.  If  all  our  five  hundred 
and  eighty  seven  rolling-mills  were  arranged  in  a  circle  around 
Pittsburgh,  the  circle  would  be  a  hundred  miles  in  diameter. 
Inside  this  might  be  a  circle  three-quarters  as  large,  com- 
posed of  our  five  hundred  and  thirty-two  smaller  steel-mills 
and  our  three  thousand  one  hundred  and  sixty-one  puddling 
furnaces.  The  five  hundred  and  seventy-seven  open-hearth 
works  would  make  a  third  circle,  fifty  miles  across.  The  four 
hundred  and  ten  furnaces  would  form  a  fourth,  thirty-five 
miles  in  diameter.  And  in  the  centre  would  be  a  flaming 
hub  of  one  hundred  and  three  Bessemer  converters,  a  mile  in 
circumference,  pouring  out  a  fiery  river  of  molten  steel  at 
the  rate  of  two  and  a  quarter  million  pounds  every  hour  of 
the  day  and  night. 

Put  the  whole  American  nation  on  the  scales  and,  at  ninety 
pounds  apiece,  they  will  weigh  no  more  than  the  iron  that  our 
furnaces  are  making  every  two  months.  In  the  last  three  years 
we  have  produced  enough  to  outweigh  all  the  men,  women  and 
children  in  the  world. 

King  Steel  has  dethroned  King  Corn  and  King  Cotton. 
There  are  men  now  living  who  can  remember  when  the  United 
States  produced  no  steel  at  all  and  very  little  iron,  yet  to-day 
our  furnaces  make  enough  iron  to  put  a  belt  around  the  earth, 

340 


THE   FUTURE   OF   STEEL 

ten  feet  wide  and  an  inch  thick.  This,  the  iron  men  say,  is  a 
fair  year's  work.  As  we  have  seen,  we  use  six  times  our  own 
weight  of  iron  in  one  year — two  thousand  seven  hundred  and 
fifty  pounds  per  family.  We  feed  our  furnaces  every  twelve 
months  a  mountain  of  ore  that  would  tower  a  hundred  feet 
above  our  highest  skyscrapers. 

Gather  together  all  the  families  that  depend  directly  upon 
the  iron  and  steel  trade  for  their  living,  and  they  will  make 
a  State  more  populous  than  Illinois,  which  is  the  third  largest 
in  the  Union.  This  "  iron  and  steel  world/'  as  it  justly  calls 
itself,  has  its  own  literature — technical  books  that  are  as  mys- 
terious as  Sanskrit  to  the  ordinary  reader,  and  magazines 
whose  advertising  brings  a  small  fortune  with  every  issue.  It 
has  its  own  laws,  its  own  perils,  its  own  rewards.  If  we  con- 
sider it  with  regard  to  these  three  factors — its  numbers,  its 
wealth  and  its  organisation — there  is  no  trade  to  equal  it  on 
the  face  of  the  earth. 

Plow  do  we  know  it  will  grow?  Because  of  the  increasing 
number  of  new  uses  for  iron  and  steel.  It  is  only  a  matter  of 
time  until  railroads  will  have  to  buy  steel  ties  as  well  as  steel 
rails.  The  heavier  traffic  and  the  increased  cost  of  wooden 
ties  will  make  the  steel  tie  a  necessity.  Steel  ties  are  not  an 
experiment.  The  Carnegie  company  has  been  using  them  for 
six  or  seven  years  on  one  of  its  ore  railways.  The  Erie,  Bal- 
timore and  Ohio,  Pennsylvania,  New  York  Central,  and  Lake 
Shore  railroads  are  already  throwing  out  wooden  ties  and  lay- 
ing down  steel  ones.  Such  an  improvement  will  enormously 
increase  the  steel  bills  of  the  railroads.  They  are  to-day  buy- 
ing one-eighth  of  all  the  steel,  and  a  ton  of  ties  will  not  go 
half  as  far  on  a  railway  as  a  ton  of  rails.  At  the  Homestead 
works  there  is  already  a  steel-tie  department — the  germ  of 
a  new  industry. 

As  for  the  pressed-steel  car  business,  that  has  been  an  estab- 
lished success  for  half  a  dozen  years.  One  company  reports 

341 


THE   ROMANCE   OF   STEEL 

earnings  of  fourteen  million  dollars  in  that  time.  England 
has  not  yet  started  in  this  line.  When  Charles  T.  Yerkes 
was  equipping  his  new  underground  London  railway  he  was 
obliged  to  place  an  order  for  four  hundred  steel  cars  with  an 
American  firm,  as  no  English  manufacturer  could  make  them. 
Steel  trolley-cars  are  now  running  on  the  streets  of  American 
cities.  Six  months  ago  the  first  steel  baggage-car  was  placed 
on  the  rails  of  the  Erie  Railroad.  The  frequent  loss  of  life 
in  wooden  passenger-coaches,  which  are  easily  "  telescoped  " 
in  the  event  of  a  collision,  is  compelling  railroads  to  consider 
the  steel-car  proposition.  It  was  noticed  by  railway  men  that 
among  the  cars  exhibited  at  the  St.  Louis  Exhibition,  not  one 
was  made  of  wood. 


THE  NEW  STEEL  CITY 

Then  there  are  to  be  the  new  steel  cities  of  the  future.  We 
have  already  built  our  cities  twice — once  of  wood  and  once  of 
brick.  For  nearly  twenty  years  we  have  been  building  a  few 
high  city  structures  of  steel,  but  steel-makers  declare  that  the 
private  houses  of  the  coming  generation  will  contain  a  sur- 
prising amount  of  steel  in  various  forms. 

"  I'm  building  a  new  house  at  Pride's  Crossing,  Massachu- 
setts, and  I'm  astonished  to  see  how  much  steel  it  takes,"  said 
Mr.  Frick. 

"  Expanded  steel,"  which  resembles  a  mesh  made  by  steel 
ribbons,  is  replacing  lath.  Ornamental  steel  ceilings  are  re- 
placing plaster.  Corrugated  iron  in  thin  sheets  is  replacing 
wooden  siding  in  the  building  of  factories.  In  England  and 
Germany  many  new  uses  are  being  found  for  steel  in  connec- 
tion with  cement — an  absolutely  fire-proof  combination.  As 
steel  plants  are  now  manufacturing  cement  from  their  slag, 
they  will  reap  a  double  profit  if  this  method  of  building  is 
adopted  in  the  United  States. 

342 


THE   FUTURE   OF    STEEL" 

Wood  has  had  its  day  in  the  building  of  cities.  The  recent 
disastrous  fires  in  Buffalo,  Baltimore,  and  San  Francisco  have 
shown  that  the  steel  frame  is  not  enough.  As  long  as  wooden 
floors,  partitions,  doors,  window-frames,  etc.,  remain,  there 
is  danger.  Our  total  fire  loss  is  between  one  and  two  hundred 
millions  a  year.  In  the  last  twenty- four  years  more  than  three 
billions  have  gone  up  in  smoke.  And  experts  announce  that 
the  timber  supply  of  Minnesota  will  be  exhausted  in  less  than 
fifteen  years.  So  it  is  not  unlikely  that  the  boys  and  girls  now 
in  the  public  schools  will  live  to  see  the  passing  of  the  frame 
house,  and  the  substitution  of  a  structure  made  of  cement  and 
steel. 

Several  American  cities  can  now  boast  steel-frame  churches 
of  the  largest  size.  New  York's  magnificent  Subway  is  prac- 
tically a  thirty-mile  tube  made  of  steel  and  cement,  just  as  its 
elevated  railway  is  a  thirty-mile  steel  bridge.  That  collossal 
structure,  the  new  twenty-million-dollar  Williamsburg  Bridge, 
between  New  York  and  Long  Island,  required  forty-five  thou- 
sand tons  of  steel.  In  a  skyscraper  of  the  first  class,  such  as  the 
new  First  National  Bank  Building,  of  Chicago,  for  instance, 
with  its  eighteen  acres  of  floor  space,  ten  thousand  tons  of  steel 
are  riveted  together. 

Take  another  item — wire.  It  is  hard  to  realise,,  but  true, 
that  there  are  twice  as  many  millions  in  wire  as  there  are  in 
structural  steel.  At  its  present  rate  of  increase,  wire  will  soon 
require  more  steel  than  rails.  Out  of  every  ten  pounds  of 
steel  produced,  one  is  manufactured  into  wire.  Nothing  else 
takes  so  many  forms.  It  can  be  made  into  a  Brooklyn  Bridge 
cable,  with  six  thousand  four  hundred  strands,  or  into  an 
almost  invisible  thread,  one-tenth  as  thick  as  a  hair  from  your 
head.  It  may  be  woven  into  the  cage-front  of  a  tiger,  or  into 
a  fine-spun  gauze  with  forty  thousand  meshes  to  the  square 
inch.  You  will  find  it  in  your  piano,  sustaining  a  tension  of 
about  twenty  tons,  and  in  your  watch,  made  into  the  tiny  hair- 

343 


THE   ROMANCE   OF   STEEL 

spring.  In  fact,  when  we  sum  up  the  almost  innumerable 
uses  of  wire,  we  can  understand  the  enthusiasm  of  John 
W.  Gates,  when  he  exclaimed,  "  There's  millions  in  it!" 
and  forthwith  made  himself  the  wire  king  of  the  United 
States. 

To-day,  even  in  the  most  insignificant  items,  there  are  mil- 
lions to  be  made.  Last  year  former  King  Cotton  paid  about 
two  and  a  half  millions  to  King  Steel  for  cotton-ties  alone — 
thin  strips  of  sheet-iron  used  to  bind  the  bales  of  cotton.  A 
carpet-tack  is  not  an  imposing  article  of  commerce,  yet  a 
single  factory  in  Chicago  is  producing  three  million  pounds  in 
a  year.  A  wire  nail  looks  unimportant  enough,  yet  any  one 
who  owned  the  thirteen  million  kegs  of  wire  nails  that  we  pro- 
duced last  year  would  possess  a  fortune  equal  at  least  to  that 
of  Frick. 

Many  an  order  for  a  single  steel  article  carries  in  itself  a 
competency.  To  name  a  few,  there  are — the  new  steel  dry- 
dock  at  New  Orleans,  five  hundred  and  twenty-five  feet  in 
length  and  one  hundred  feef  wide;  the  three  hundred  and  ten 
foot  steel  chimney  of  the  Nichols  Chemical  Company,  Brook- 
lyn ;  an  engine  in  the  United  States  Steel  Corporation's  plant  at 
Youngstown  that  weighs  nearly  a  million  pounds;  the  Man- 
hattan bridge;  the  three  enormous  steel  flumes,  eighteen  feet 
in  diameter  and  a  mile  in  length,  which  have  recently  been 
laid  at  Niagara  Falls;  and  J.  J.  Hill's  group  of  steel  elevators 
at  Superior,  Wisconsin,  holding  three  million  bushels  of  grain 
apiece. 

There  has  been  for  several  years  a  block  of  steel  roadway  in 
New  York  City,  the  necessary  steel  plates  having  been  donated 
by  Mr.  Schwab.  To  equip  a  road  with  these  steel  plates 
would  cost,  it  is  said,  not  more  than  fifteen  hundred  dollars  a 
mile,  and  it  is  being  freely  predicted  that  the  road  of  the 
future  will  be  of  this  kind.  "  I  expect  to  see  a  road  of  this  sort 
from  New  York  to  San  Francisco,  and  around  the  suburbs 

344 


THE   FUTURE  OF   STEEL 

of  all  our  large  American  cities,"  said  W.  E.  Scarritt,  presi- 
dent of  the  American  Automobile  Association. 

Almost  every  week  the  newspapers  announce  a  new  use  for 
steel.  Steel  bathtubs  are  being  stamped  out  at  the  rate  of  a 
hundred  and  fifty  a  day.  Steel  furniture  is  worrying  the  fur- 
niture makers  of  Michigan.  Barrels,  so  one  manufacturer 
says,  are  henceforth  to  come  from  the  steel  mill  and  not  from 
the  cooper-shop.  As  we  use  about  three  hundred  million 
barrels  a  year  just  now,  this  one  item  may  mean  new  plants, 
new  multimillionaires. 

Now  that  steel  is  being  used  in  construction  work,  there  is 
scarcely  any  limit  upon  the  novelties  that  we  may  expect.  We 
hear  of  an  aerial  ferry  in  Duluth,  by  means  of  which  a  car  is 
swung  in  midair  from  shore  to  shore,  and  of  an  aerial  hotel 
in  Switzerland,  above  the  Lake  of  the  Four  Cantons,  hanging 
two  thousand  feet  above  the  water. 

THE  STEEL  COST  OF  WAR 

If  the  great  war  of  the  future,  long  predicted,  should  come 
— if  the  idle  armies  and  navies  of  Europe  should  suddenly 
rush  together  in  the  old  undying  game  of  war,  the  two  de- 
cisive factors  in  the  conflict  would  be  money  and  steel.  In 
their  assault  on  Port  Arthur  the  Japanese  fired  two  thousand 
tons  of  shells.  Both  nations  combined  fired  away  sixty  mil- 
lion dollars'  worth  of  death  and  destruction  in  the  struggle 
over  a  single  fortress.  The  death  of  every  soldier  cost  more 
than  his  weight  in  iron. 

In  the  long  stretch  of  American  iron-making,  from  1645 
to  1860,  there  was  not  one  vast  fortune  made  in  the  trade. 
It  was  the  Civil  War  that  created  the  first  multimillionaires 
of  steel  and  provided  the  capital  for  the  giant  plants  of  to- 
day. And,  as  Bloch,  Atkinson,  and  other  statisticians  have 
shown,  the  wars  of  the  past  were  inexpensive  little  quarrels 

345 


THE   ROMANCE   OF   STEEL 

when  compared  with  the  wars  of  the  present  or  the 
future. 

Most  of  the  facts  point  toward  an  enormous  foreign  trade 
in  the  near  future.  No  degree  of  growth  in  this  line  should  be 
surprising,  for  the  reason  that  the  history  of  our  iron  and  steel 
exports  has  been  nothing  but  a  series  of  surprises,  both  to  our- 
selves and  to  foreign  nations.  To-day  we  are  selling  the  other 
countries  more  than  a  hundred  million  dollars'  worth  of  iron 
and  steel  every  year.  The  checks  our  steel  men  get  from  their 
foreign  customers  in  sixteen  months  would  have  paid  the 
whole  cost  of  the  American  Revolution. 

Yet  it  is  only  a  century  ago  since  not  a  pound  of  iron  was 
made  in  Ohio — since  Pittsburgh  was  a  frontier  village,  with- 
out a  rolling-mill  or  a  bank — since  Jefferson  wrote  to  his 
friend  John  Adams:  "We  cannot  make  iron  in  competition 
with  Sweden  or  any  other  foreign  country." 

It  is  only  twenty-three  years  since  Andrew  Carnegie  him- 
self— the  most  sanguine  and  optimistic  of  men,  said:  "  Steel 
is  made  in  England  for  one-half  of  what  it  costs  in  the  United 
States.  Not  in  our  day  will  it  be  wise  for  America  to  leave 
the  land.  It  is  a  very  fair  division  as  it  stands — the  land  for 
America,  the  sea  for  England." 

In  1898  an  American  bridge  company  got  the  contract  for 
building  the  great  Atbara  Bridge  on  the  Khartum  railroad, 
to  the  astonishment  of  the  British  steel  men.  The  following 
year  locomotives  made  in  Philadelphia  were  running  on  the 
Midland  railway  in  England.  At  the  Glasgow  Exposition 
it  was  admitted  that  the  best  exhibit  of  tools,  lathes,  drills,  etc., 
was  not  from  Sheffield  or  Newcastle,  but  from  Milwaukee. 
Then  the  Glasgow  Herald  appeared  with  a  notice  that  it  was 
now  being  printed  upon  a  "  Hoe  "  press.  In  1904  four  Brit- 
ish steamers  sailed  from  Conneaut  laden  with  steel  for  Liver- 
pool— the  first  all-water  shipment  from  Pittsburgh. 

346 


THE   FUTURE   OF    STEEL 

OUR  WORLD-WIDE  SUPREMACY 

Five  years  ago  Londoners  were  startled  to  see  the  steel  frame 
of  an  American  skyscraper  towering  above  Chancery  Lane. 
Then  the  Duke  of  Maryborough,  having  married  an  Ameri- 
can wife,  gave  an  American  firm  the  contract  to  build  his  new 
steel-frame  house  on  Curzon  Street.  Schwab,  being  in  Eng- 
land, made  a  few  remarks  which  added  to  the  uneasiness  of 
British  steel-makers. 

"  We  can  sell  billets,  delivered  in  Great  Britain,"  he  said, 
"  for  $16.50  a  ton — $2.69  cheaper  than  the  present  British 
price." 

Some  one  else  figured  out  that  the  labour-cost  of  a  ton  of  iron 
in  Pittsburgh  was  reduced  to  forty-one  cents,  as  against  sev- 
enty-two in  England,  although  Pittsburgh  wages  were  double 
those  in  Sheffield. 

Last  year  we  sent  over  twenty  million  dollars'  worth  of  iron 
and  steel  goods  to  Great  Britain.  The  rest  went  to  various 
parts  of  the  world.  At  the  Alexandria  docks,  in  Egypt,  you 
may  see  coal  unloaded  by  American  machinery  into  American 
pressed-steel  cars.  It  will  be  drawn  on  Pittsburgh  rails  by 
Philadelphia  locomotives  to  Khartum. 

On  the  banks  of  the  Jordan,  in  the  Holy  Land,  you  may  see 
an  American  bottling-plant,  made  in  Cleveland,  which  is  ship- 
ping the  water  of  the  sacred  river  to  all  Christian  countries. 

In  remote  parts  of  India,  Burma,  Persia,  Madagascar,  you 
may  find  structural  steel  from  Homestead. 

The  rails  and  bridges  over  which  the  Russian  armies  rode 
from  Moscow  to  Port  Arthur,  and  the  steel  ribs  of  the  depots 
and  the  Dalny  houses,  were  for  the  most  part  made  in  Pitts- 
burgh and  put  in  place  by  American  machinery. 

It  was  a  strange  fact  that  immediately  after  the  Spanish- 
American  war,  Spain  became  for  a  time  our  best  customer  for 
railway  material  and  machinery.  One  Spanish  importer  in 

347 


THE   ROMANCE   OF   STEEL 

Barcelona  had  the  words,  "American  machinery  forever!" 
engraved  on  his  notepaper.  Germany,  our  chief  competitor, 
opened  her  eyes  recently  when  a  Connecticut  firm  shipped  to 
Berlin  a  complete  foundry.  This  firm,  it  appears,  makes 
foundries  of  different  sizes  and  sells  them  by  number,  as 
though  they  were  collars  or  shoes.  Even  the  European  farmers 
have  caught  the  habit;  they  have  been  paying  us  over  a  dozen 
millions  a  year  for  our  agricultural  machinery. 

To-day  our  iron  and  steel  supremacy  is  questioned  by  no  one. 
Lord  Rosebery  tells  a  London  audience  to  take  heed  to  "  the 
American  disdain  of  finality."  American  young  women,  on 
their  way  to  Dresden  to  study  music,  are  passed  by  German 
young  men  who  are  on  their  way  to  Pittsburgh  to  study  steel. 
One  English  writer  has  summed  up  fourteen  points  in  which 
the  American  steel  trade  is  superior  to  the  British,  as  follows: 
More  ore;  cheaper  coke;  cheaper  transportation;  tariff;  supe- 
rior skill  of  workmen;  greater  efficiency  of  superintendents; 
larger  scale  of  operations;  more  enterprise;  promotion  by 
merit;  larger  scrap-heap;  higher  wages;  bonus  system;  em- 
ployment of  younger  men ;  and  more  complete  organisation. 

Two  things  we  lack — a  better  knowledge  of  what  foreign 
nations  want,  and  an  American  merchant  fleet.  The  Pitts- 
burgher  too  often  assumes  that  what  suits  him  will  suit  the  rest 
of  the  human  race.  Even  steel  men  have  some  national  preju- 
dices and  customs. 

"When  I  first  shipped  iron  to  China,"  said  William  A. 
Rogers,  of  Buffalo,  "  my  agents  had  difficulty  in  selling  it. 
The  Chinese  said,  '  Melican  iron  tloo  hard.'  After  a  while 
we  discovered  that  they  had  been  accustomed  to  buy  iron  in 
tiny  bars  that  could  be  broken  by  hand,  while  our  bars  were 
so  thick  that  it  was  half  a  day's  work  to  break  one.  We  made 
our  bars  thinner  and  there  was  no  more  trouble." 

As  to  our  need  of  more  American  ships,  it  has  been  stated 
that  ocean  freights  can  be  cut  in  half  by  the  establishment  of  an 

348 


THE    FUTURE   OF    STEEL 

American  merchant-marine.  No  freight  is  easier  to  carry  than 
steel,  yet  at  present  the  rate  from  Pittsburgh  to  Liverpool  is 
equal  to  the  cost  of  making  the  steel  from  the  pig  iron. 


THE  STABILITY  OF 

As  to  where  the  Pittsburgh  of  the  future  is  to  stand,  no  loca- 
tion is  ideal.  There  are  so  many  factors  necessary  to  success 
in  the  steel  trade  that  no  one  spot  contains  them  all.  At 
present  the  trade  is  scattered  between  Birmingham  and 
Chicago,  and  between  Worcester  and  Pueblo,  with  the  vast 
bulk  of  it  in  the  Pittsburgh  region.  Since  1645,  the  centre  of 
the  industry  has  moved  from  Lynn,  through  Connecticut  to 
New  Jersey,  then  via  Philadelphia  to  Pittsburgh,  where  it  has 
remained  for  fifty  years.  But  since  Minnesota  has  become  the 
principal  storehouse  of  ore,  there  has  been  a  growing  convic- 
tion that  the  steel  mills  and  furnaces  of  the  future  will  be 
nearer  to  their  base  of  supplies.  The  point  in  dispute  is 
whether  the  ore  should  be  brought  to  the  coke,  as  at  Pittsburgh, 
or  the  coke  to  the  ore,  as  at  Duluth. 

The  Pittsburgher,  of  course,  laughs  at  prophecies.  The 
roar  and  smoke  that  he  loves  will  continue,  he  thinks,  until  the 
last  trump  shall  sound.  He  feels  that  even  then  the  response 
of  Pittsburgh  will  be :  "  Can't  go — too  busy." 

If  you  remind  him  that  Pittsburgh  is  four  hundred  and  fifty 
miles  from  tide-water,  he  replies :  "  That  is  a  disadvantage  of 
only  two  dollars  a  ton,  and  it  will  be  still  less  when  we  build 
our  ship-canal  to  Erie  and  deepen  the  Ohio  River  to  Cairo." 

If  you  say  that  Pittsburgh  is  a  thousand  miles  from  its  ore, 
he  replies :  "  It  is  not  the  distance  that  counts,  but  the  cost  of 
mining  and  freight.  We  can  dig  fifty  tons  in  five  minutes,  and 
we  bring  it  to  our  furnaces  in  our  own  ships  and  on  our  own 
railroads,  at  the  lowest  cost  ever  reached  in  the  history  of 
transportation."  It  is  the  general  opinion  that  the  supremacy 

349 


THE   ROMANCE    OF    STEEL 

of  the  Pittsburgh  region  will  not  be  endangered  by  any  com- 
petitor now  in  the  field,  or  by  any  changes  that  can  be  fore- 
seen at  the  present  time.  The  historian  is  not  yet  born,  so  say 
the  steel  men,  who  shall  write  the  "  History  of  the  Rise  and 
Fall  of  the  Steel  Empireof  Pittsburgh." 

If  Carnegie  had  been  twenty  years  younger  in  1901 — and 
this  was  the  unanimous  wish  of  his  forty-five  thousand  men— 
the  pivotal  point  of  our  steel  trade  would  to-day  be  Conneaut, 
on  Lake  Erie,  over  a  hundred  and  fifty  miles  north  of  Pitts- 
burgh. Many  of  the  forty  young  ex-partners  of  Carnegie 
express  regrets  that  the  "  chief  "  did  not  remain  in  command 
and  carry  out  his  original  plan  to  build  an  immense  steel  mill 
at  Conneaut.  Carnegie  had  bought  five  thousand  acres  near 
the  Conneaut  docks.  He  had  paid  two  hundred  farmers  half 
a  million  to  leave  their  homes.  He  had  given  Conneaut  real 
estate  such  a  boom  that  its  citizens  have  been  stranded  ever 
since  on  the  high  banks  of  expectation.  "  We  had  the  men, 
the  money,  the  raw  materials,  and  the  location,"  say  the  Car- 
negians.  "  Conneaut  was  the  hub  of  the  wheel,  and  in  five 
years  we  could  have  made  the  Carnegie  company  irresistible." 

"  Conneaut  ft  the  central  spot,"  said  Carnegie,  when  I  asked 
him  concerning  the  future  of  the  steel  trade.  "  It  is  the  place 
where  all  the  raw  materials  can  best  be  assembled."  Looking 
further  ahead,  as  usual,  than  other  steel  men,  he  spoke  of 
"  the  movement  towards  the  lakes."  There  is  no  doubt  that  the 
threat  of  Conneaut  added  fifty  or  a  hundred  millions  to  the 
price  which  he  demanded  and  obtained  from  Morgan. 

If,  as  a  few  suggest,  the  railroads  should  decide  to  enter  the 
steel-making  business,  now  that  there  is  a  prospect  of  their 
having  to  buy  not  only  rails,  but  steel  ties  and  steel  cars  as 
well,  the  probability  is  that  they  would  select  Ashtabula  as 
their  manufacturing  spot.  This  is  five  or  six  miles  from  Con- 
neaut, with  a  much  larger  harbour.  Until  recently,  Ashtabula 
has  been  the  busiest  ore-port  on  the  lakes.  To-day  Conneaut 

35Q 


THE   FUTURE   OF   STEEL 

stands  first.  The  Ashtabula  ore-docks  are  owned  mainly  by  the 
Pennsylvania  and  Lake  Shore  railways,  so  that  if  these  rail- 
ways should  decide  to  make  their  own  steel  as  well  as  their 
own  cars  and  locomotives,  which  at  present  is  not  likely,  they 
would  naturally  choose  a  site  which  n^ould  be  as  near  as  pos- 
sible to  the  ore. 

Cleveland  had  the  chance  to  become  Pittsburgh  the  Second, 
and  lost  it.  Before  Carnegie  got  his  eye  on  Conneaut,  he 
called  Cleveland  "  the  central  zone."  But  Cleveland  lacked 
the  public  spirit  to  improve  its  harbour.  In  1896  its  port  was 
the  most  dilapidated  on  the  Great  Lakes.  The  entrance  was 
narrow  and  dangerous.  The  piers  were  rotten.  The  water 
was  shallow.  Only  $50,000  was  spent  upon  it  in  three  years. 
Vessels  were  wrecked  at  the  mouth  of  the  harbour.  But  the 
water-front  was  in  the  hands  of  obstructive  railroads  and 
numerous  small  holders,  who  blocked  the  efforts  of  the  public- 
spirited  Chamber  of  Commerce.  Cleveland  became  the  head- 
quarters of  the  Lake  Superior  ore  trade  and  the  shipping. 
Scores  of  millions  of  iron  and  steel  money  have  helped  to  make 
Cleveland  the  richest  city  of  its  size.  But  it  has  never  become 
a  steel-making  city. 

The  traveller  who  for  the  first  time  visits  Cleveland,  and 
finds  a  more  populous  city  than  Madrid,  may  also  find  some 
old  residents  who  can  remember  when  it  was  a  tiny  village  in 
the  forest.  Such  has  been  the  rapid  growth  of  the  "  Forest 
City."  It  is  now  a  city  of  three  thousand  streets  and  three 
thousand  manufacturing  establishments.  Its  specialties  are 
wire,  wire  nails,  nuts,  bolts,  hardware,  etc.  Its  mechanics 
have  more  skill  than  those  of  Pittsburgh,  but  receive  less  pay. 

One  would  think  that  Cleveland  and  Pittsburgh  had  entered 
into  a  formal  agreement  with  one  another  to  divide  the  steel 
trade — Pittsburgh  to  make  the  steel  and  Cleveland  to  manu- 
facture it  into  the  various  articles  of  commerce.  So  far, 
neither  has  encroached  seriously  upon  the  province  of  the 


THE   ROMANCE   OF   STEEL 

other.  Cleveland  has  followed  the  advice  of  its  first  great 
steel-maker,  Henry  Chisholm,  who  said:  "  Make  up  as  much 
of  your  steel  as  possible.  Do  not  sell  it  as  raw  material." 
Chisholm  was  the  father  of  the  Cleveland  steel  trade — a  self- 
made  man  of  extraordinary  force  and  ability.  He  formulated 
the  manufacturing  policy  of  the  city,  and  built  up  a  fortune 
which  has  been  made  greater  by  his  sons. 

Lorain,  near  Cleveland,  is  an  ambitious  young  steel  city. 
Its  natural  advantages  are  cheaper  land  and  a  good  harbour. 
When  Mayor  "  Tom  "  Johnson,  of  Cleveland,  invented  his 
"  girder  rail "  for  street  railways — the  rail  that  he  rode  to 
wealth,  he  selected  Lorain  as  the  best  site  for  his  steel  mills. 
After  a  few  years  of  successful  operation,  he  dropped  steel  and 
picked  up  politics,  letting  his  Lorain  Works  slip  into  the 
Federal  Steel  Company,  and  thereby  into  the  United  States 
Steel  Corporation. 

Continuing  westwards,  we  are  surprised  to  find  that  Toledo, 
with  its  twenty-three  railroads  and  twenty-five  miles  of  docks, 
has  no  iron  or  steel  plant  of  any  size.  A  great  quantity  of  iron 
is  used,  but  very  little  made.  A  tract  of  355  acres  is  being 
held  by  a  Cleveland  ore  company,  which  expects  at  some  time 
in  the  future  to  build  a  steel  mill. 

Detroit,  also,  for  some  equally  inexplicable  reason,  does  not 
make  a  pound  of  Bessemer  or  open  hearth  steel.  It  holds  the 
honour  of  having  produced  the  first  Bessemer  steel  and  the  first 
steel  multimillionaire — Captain  Eber  B.  Ward.  The  eclipse 
of  Detroit  as  a  steel  city  is  an  illustration  of  the  fact  that  loca- 
tion and  opportunity  are  not  the  two  greatest  factors.  The 
first  Lake  Superior  ore  was  discovered  in  Michigan  by  Michi- 
gan men.  Captain  Ward's  $5,000,000  fortune  had  demon- 
strated the  profitableness  of  the  steel  business.  Yet  there  is  no 
steel  plant  of  any  kind  at  Marquette  or  the  American  Soo; 
and  the  steady  procession  of  ore-ships  that  carry  prosperity  to 
Pittsburgh  and  Youngstown  sail  past  the  docks  of  Detroit.  If 

352 


HENRY    CHISHOLM 


OFTHE 

UNIVERSITY 

OF 


THE    FUTURE  OF    STEEL 

Captain  Ward  had  lived  for  twenty  years  longer,  and  kept 
away  from  newspaper  controversies  and  spiritualistic  seances, 
his  force  and  enterprise  would  have  put  Detroit  in  the  front 
rank  as  a  steel  city.  Two  years  ago  D.  R.  Hanna,  son  of  the 
late  Mark  Hanna,  selected  Detroit  as  a  favorable  site  to  make 
iron,  and  is  now  producing  about  100,000  tons  a  year.  New 
railroads  now  connect  Detroit  with  the  coal  fields  of  Ohio  and 
West  Virginia;  and  coke  ovens  have  been  built.  But  at  the 
present  time,  Michigan,  the  birthplace  of  cheap  steel,  does  not 
make  an  ounce  of  the  indispensable  metal. 

Cincinnati,  too,  had  its  chance  and  lost  it.  The  first  really 
good  steel  made  in  America  was  produced  in  Cincinnati  by 
William  Garrard  in  1832.  It  was  crucible  steel,  not  the  cheap 
metal  that  is  commonly  called  steel.  But  Cincinnati  has  for- 
gotten that  Garrard  lived  and  worked.  I  looked  through  its 
public  library  in  vain  for  the  mention  of  his  name.  Its  Cham- 
ber of  Commerce  was  dumb;  and  with  the  exception  of  an  old 
oil  painting  in  the  rooms  of  the  Historical  Society,  there  is 
nothing  left  in  Cincinnati  to  honour  the  memory  of  the  first 
American  steel-maker.  The  Cincinnatians  who  read  this  page 
will  probably  hear  of  him  for  the  first  time.  To-day  Cincin- 
nati is  content  to  be  one  of  the  leading  pig-iron  markets  in  the 
world,  and  perhaps  the  greatest  producer  of  iron  and  steel 
safes. 

Chicago,  of  course,  is  second  only  to  Pittsburgh  as  an  iron 
and  steel  city.  If  there  were  no  Pittsburgh  and  no  Carnegie 
company,  we  should  still  have  much  to  boast  of  in  Chicago 
and  the  Illinois  Steel  Company,  not  to  mention  the  great 
works  that  the  Steel  Trust  are  building  at  its  new  town  of 
Gary.  One-third  of  all  our  steel  rails  are  made  at  Chicago. 

The  unique  feature  of  Chicago's  iron  and  steel  trade,  so  far 
as  the  future  is  concerned,  is  that  the  corporations  which 
manufacture  agricultural  machinery  have  bought  their  own 
ore-mines,  coal-mines,  timber-lands,  furnaces,  and  rolling- 

353 


THE   ROMANCE   OF   STEEL 

mills.  Two-thirds  of  all  the  agricultural  implements  in  the 
world  are  made  in  Chicago,  but  the  steel  that  is  used  adds 
nothing  to  the  profits  of  the  steel  kings. 

Milwaukee  is  destined  to  be  the  "machinery  city"  of 
America.  When  the  great  Allis-Chalmers  machinery  works 
is  completed,  if  it  ever  is,  it  will  be  unapproachable  in  its 
line.  And  another  city  which  will  not  allow  itself  to  be  for- 
gotten when  the  conversation  is  upon  the  future  of  steel,  is 
Duluth.  Hitherto,  indeed,  so  far  as  the  making  of  iron  is 
concerned,  the  record  of  Duluth  is  a  story  of  calamity  and 
failure.  The  unparalleled  ore-supply  of  the  Mesaba  Range  is 
practically  in  Duluth's  back  yard.  It  has  ten  square  miles  of 
harbour.  The  St.  Louis  River  flings  itself  at  the  city's  feet 
in  a  series  of  torrents  which  might  provide  unlimited  elec- 
trical power.  And  the  ore-ships  that  come  back  from  Lake 
Erie  without  cargoes  might  bring  coal  and  all  other  imported 
necessities  at  the  lowest  freight  rates. 

Yet  in  this  year,  1907,  Duluth  can  point  to  only  one  small 
furnace,  making  two  hundred  and  fifty  tons  a  day.  There  is 
not  a  steel  mill  in  the  State.  The  Pittsburgh  vikings  sail  up 
to  the  iron  ranges  and  carry  off  the  loot — millions  of  dollars' 
worth  every  summer  week.  And  all  the  while,  for  some  rea- 
son which  no  outsider  can  understand,  the  men  of  Duluth  and 
Superior — twin  cities — have  been  satisfied  to  run  errands  and 
quarrel,  like  a  couple  of  messenger-boys. 

Some  day  Duluth  will  awake  and  make  her  dream  come 
true.  She  will  unite  with  Superior,  as  Pittsburgh  will  with 
Allegheny.  The  two  cities  are  really  one  in  financial  inter- 
ests. Now  that  less  and  less  coal  is  needed  to  produce  a  ton 
of  iron,  Duluth's  opportunity  to  build  profitable  blast-fur- 
naces is  growing  better  year  by  year.  Geographically,  Duluth 
is  located  so  that  she  cannot  escape  being  an  important  iron 
and  steel  community.  She  stands  at  the  western  doorway 
to  the  Great  Lakes — almost  in  the  exact  centre  of  the  conti- 

354 


THE    FUTURE   OF    STEEL 

nent.    One  of  the  few  possible  sites  for  a  grand  city  is  hers, 
and  she  has  her  face  towards  the  rising  sun. 

Texas  and  Puget  Sound  are  also  mentioned  as  probable  iron 
and  steel  centres.  At  present,  neither  region  is  to  be  found  on 
the  map  of  the  iron  business.  Texas  has  a  couple  of  little 
charcoal  furnaces,  one  being  owned  and  operated  by  the  State, 
arid  Seattle  has  one  small  furnace  and  rolling-mill.  It  is  re- 
ported that  immense  deposits  of  fine  iron  ore  have  been  found 
in  Llano  County,  Texas;  and  since  the  discovery  of  the  oil 
at  Beaumont,  which  could  be  used  as  fuel,  the  door  of  oppor- 
tunity has  been  opened  to  the  Texans.  Beaumont  is  near  the 
sea,  northeast  from  Galveston,  and  the  ore  mines  of  Llano. 
Cuba,  Venezuela,  and  Colombia  are  within  a  thousand  miles. 
Here  is  a  hint  for  some  embryonic  Carnegie  of  the  Lone  Star 
State. 

CHANCE  FOR  A  SECOND  CARNEGIE 

That  there  is  a  chance  for  a  second  Carnegie,  cannot  be 
doubted,  unlikely  as  the  outlook  may  seem  to  the  steel-workers 
of  Homestead  and  Duquesne.  It  is  the  unexpected  that  hap- 
pens in  the  steel  world.  Any  one  who  had  predicted  a  Car- 
negie and  a  steel  fortune  of  a  quarter  of  a  billion  to  the 
Pittsburghers  of  thirty  years  ago  would  have  been  regarded 
as  an  unbalanced  enthusiast.  One  thing  is  certain — that  the 
"  American  disdain  of  finality "  will  prevent  the  formation 
of  a  perpetual  dynasty  of  steel  or  any  sort  of  monopoly. 

When  Croesus,  King  of  Lydia,  showed  Solon  his  golden 
treasures,  Solon  said :  "  If  another  comes  who  hath  better  iron 
than  you,  he  will  take  away  your  gold."  The  same  warning 
may  be  given  to  our  steel  kings.  As  long  as  American  work- 
men continue  to  think  while  they  work,  there  may  come  some 
revolutionary  idea  that  will  pull  down  the  old  dynasty  and 
set  up  a  new  one. 

The  battle  against  conservatism  and  self-complacency  is  not 

355 


THE   ROMANCE   OF   STEEL 

ended.  Fifty  years  ago,  when  Kelly  and  Bessemer  pointed 
out  the  path  to  millions,  they  were  treated  like  impertinent 
meddlers  by  the  steel  men  of  America  and  Europe.  Sheffield 
sneered  at  Bessemer  until  he  built  a  plant  of  his  own  and  cut 
prices  in  half.  Pittsburgh  lost  twenty-eight  years  by  its  disdain 
of  Kelly  and  his  "  air-boiling  process."  And  in  my  hundreds 
of  conversations  with  the  chief  steel  men  of  to-day,  I  have 
found  the  same  conservative  attitude  in  many  instances — the 
same  content  with  things  as  they  are,  and  the  same  haughtiness 
towards  the  man  who  has  nothing  but  an  idea. 

There  are  still  heart-sick  inventors  tramping  from  one  cor- 
poration to  another,  flouted  by  clerks  and  bullied  by  superin- 
tendents. The  steel  trade  was  never  so  well  organised,  but  as 
yet  it  has  no  department  of  invention,  in  which  original  sug- 
gestions would  be  treated  with  respect  and  fairly  tested.  It  is 
an  erroneous  notion  that  any  large  body  of  men  will  be 
unanimously  progressive.  All  innovations  must  be  forced 
through  by  the  aggressive  few.  In  spite  of  all  that  has  been 
accomplished  by  invention  in  the  American  steel  trade,  there 
is  not  yet  any  prospect  that  a  peace  treaty  will  be  signed 
between  the  men  of  ideas  and  the  men  of  experience. 

One  innovation  which  is  running  the  gantlet  just  now,  is 
James  Gayley's  "  dry  blast."  Gayley  needs  no  sympathy.  He 
is  one  of  the  forty  Carnegie  millionaires  and  the  vice-presi- 
dent of  the  United  States  Steel  Corporation.  Seventeen  years 
ago  he  broke  the  world's  record  for  making  the  most  iron  with 
the  least  coke,  and  he  has  kept  in  the  front  rank  ever  since. 
He  will  be  the  "  pig  iron  king  "  of  the  world  when  his  inven- 
tion is  fairly  appreciated. 

Gayley's  aim  is  to  take  the  moisture  out  of  the  air  that  is 
blown  into  the  furnace.  This  is  not  a  small  item.  The  air 
blown  into  a  furnace  in  one  hour  will  contain  from  forty  to 
three  hundred  gallons  of  water.  Gayley's  plan  is  first  to  carry 
the  air  through  an  ammonia  chamber,  which  takes  out  the 

356 


THE    FUTURE   OF   STEEL 

moisture  in  the  form  of  frost.  When  the  chamber  is  clogged 
with  frost,  hot  brine  is  forced  through  the  pipes.  This  dry 
or  Gayleyised  air  produces  a  hotter  fire  with  less  coke.  At  its 
first  test,  this  process  made  eighty-nine  tons  more  in  one  day — 
a  gain  of  about  twenty  per  cent. 

"  This  method  can  be  applied  to  the  making  of  Bessemer 
steel,"  said  Mr.  Gayley.  "It  will  prolong  the  usefulness  of 
the  converter,  because  it  will  make  the  Bessemer  process 
more  uniform."  His  invention  is  not  absolutely  new  to 
iron  and  steel  men,  but  he  has  made  it  workable.  "  We  have 
all  thought  over  it  and  talked  over  it,"  said  John  Fritz;  "but 
Gayley  has  done  it." 

This  "dry  blast"  is  no  longer  an  experiment.  It  has 
been  in  use  since  August,  1904,  at  one  of  the  Pittsburgh  fur- 
naces. But  the  high  financiers  of  the  Steel  Trust  have  been 
slow  to  recognise  its  value.  Already  they  have  lost  the  chance 
to  monopolise  the  invention,  as  Gayley  has  recently  allowed 
it  to  be  installed  by  the  Warwick  Iron  and  Steel  Company,  of 
Pottstown,  Pennsylvania,  and  the  E.  &  G.  Brooke  Iron  Com- 
pany, of  Birdsboro,  Pennsylvania. 

Another  innovation  which  has  only  reached  the  "pooh, 
pooh!"  stage,  as  it  has  been  called,  is  the  making  of  steel 
direct  from  the  ore.  This  was  Kelly's  dream.  He  believed 
that  both  the  blast  furnace  and  the  converter  would  be  abol- 
ished, as  a  couple  of  unnecessary  middlemen.  During  the 
last  ten  years  of  his  life  he  studied  this  problem  and  succeeded 
in  smelting  the  ore  by  electricity.  But  the  cost  of  making  steel 
by  this  short  way  proved  to  be  more  than  the  cost  of  making  it 
the  usual  long  way.  He  maintained  that  the  day  would  come 
when  ore  would  be  smelted  for  fifty  cents  a  ton,  and  up  to 
the  time  of  his  last  sickness  he  was  engaged  in  experiments  to 
cheapen  his  process. 

This  endeavour  is  less  of  a  dream  to-day.  At  Gysinge, 
Sweden,  high-class  steel,  said  to  be  equal  to  crucible  steel,  has 

357 


THE   ROMANCE   OF   STEEL 

been  made  direct  from  the  ore  by  an  electrical  process,  water- 
power  being  used  to  cut  down  the  cost.  The  Canadian  Gov- 
ernment, which  has  been  remarkably  generous  to  steel-makers, 
has  recently  appropriated  fifteen  thousand  dollars  to  experi- 
ments in  electrical  smelting.  Edison  has  given  his  genius  and 
a  large  fraction  of  his  wealth  to  the  solution  of  this  problem. 
Consequently,  it  is  not  now  to  be  classed  among  the  will-o'- 
the-wisps,  but  among  those  improvements  that  may  be  ex- 
pected in  the  near  future. 

As  to  the  rolling-mill  of  the  future,  we  may  expect  to  see 
it  still  more  automatic.  The  diminished  fraction  of  cost 
paid  to  labour  will  continue  to  diminish.  The  ideal  mill  would 
be  one  which  was  run  altogether  by  machinery  and  a  few 
unskilled  labourers,  with  a  superintendent  giving  orders  by 
telephone.  In  fact,  the  optimistic  Holley  used  to  say,  in  a 
spirit  of  prophetic  jest:  "The  day  will  come  when  we'll 
start  a  rail-mill  on  Monday  morning,  lock  the  doors,  go  home, 
and  come  back  the  next  morning  to  count  the  rails  and  give 
the  mill  another  start." 

In  some  mills  three  workmen  out  of  four  are  unskilled, 
and  the  number  will  some  day  be  still  greater.  The  skilled 
workman  is  too  likely  to  take  credit  to  himself  for  the  great 
amount  of  work  done  by  the  machine.  Formerly  he  was  paid 
in  proportion  to  his  output,  and  it  is  hard  for  him  to  realise 
that  he  has  become  a  very  insignificant  fraction  of  the 
apparatus. 

An  instance  of  this  was  brought  to  my  notice  in  a  Pittsburgh 
mill.  A  superintendent  had  put  in  a  new  planer,  practically 
automatic.  The  first  skilled  machinist  who  was  put  in  charge 
of  it  looked  at  its  enormous  output,  and  at  once  demanded 
higher  wages.  He  was  removed  and  a  second  machinist  put 
in  his  place.  He,  too,  promptly  asked  for  more  pay.  So  did 
the  third  man.  This  put  the  superintendent  in  a  rage.  He 
went  out  into  the  yard  and  accosted  a  labourer. 

358 


THE   FUTURE  OF   STEEL 

"  Hey,  Joe,"  said  he,  "  do  you  know  anything  ~  about 
machinery?  " 

"No,  sir,"  responded  Joe. 

"Were  you  ever  in  a  machine  shop  in  your  life?". 

"No,  sir." 

"  You're  just  the  man  I  want,"  said  the  superintendent. 

The  labourer  was  put  in  charge  of  the  planer,  and  he  is 
there  still,  while  the  pride  of  the  skilled  workmen  has  been 
humbled. 

Ever  since  George  Fritz,  in  1872,  so  improved  his  rolling- 
mill  that  three  men  did  as  much  work  as  eight  were  doing  else- 
where, machinery  has  been  treating  both  human  skill  and 
human  labour  with  contempt.  Electric  motors  have  worked 
wonders,  not  only  in  mills,  but  on  docks  and  in  mines.  All 
that  many  a  workman  needs  now  is  an  ear  to  hear  an  order, 
an  eye  to  see  an  electric  button,  and  a  finger  to  touch  it.  Elec- 
tricity and  the  inventor  do  the  rest.  Dependence  upon  machin- 
ery is  becoming  almost  an  instinct  among  the  workmen  of  a 
steel-mill.  A  boy  who  was  sweeping  the  floor  of  a  Pittsburgh 
mill,  for  example,  found  his  path  obstructed  by  a  ten-ton- 
machine  which  had  not  yet  been  put  in  its  place. 

"Hello,  Jim,"  he  called  to  a  labourer,  "come  here  and 
move  this  machine  back  about  ten  feet.  I  want  to  sweep 
under  it." 

Jim  moved  a  travelling  crane  until  it  stood  over  the  ma- 
chine, and  moved  the  twenty-thousand-pound  obstacle  out  of 
the  way  as  easily  as  if  it  were  a  box  of  cigars.  The  boy  went 
on  with  his  sweeping  as  if  nothing  extraordinary  had  hap- 
pened. He  was  a  Pittsburgh  boy  and  accustomed  to  mir- 
acles. And  electricity,  which  is  a  new  force — sixteen  years 
old  in  steel  mills — will  perform  its  greatest  deeds  in  the 
future. 


359 


THE   ROMANCE   OF   STEEL 

THE  QUESTION  OF  QUALITY 

The  two  most  important  problems  of  the  future  steel-maker, 
though  they  are  not  directly  related  to  the  increase  of  profits, 
are  the  improvement  of  the  quality  of  the  steel  and  the  protec- 
tion of  the  workmen  from  injury  and  violent  death. 

"We  are  trying  all  the  time  to  make  better  steel,"  said  Mr. 
Frick.  "  But  the  difficulty  is  how  to  do  this  and  yet  keep  up 
the  quantity." 

"  Quantity!  That's  what  we're  all  after,"  said  President  A. 
C.  Dinkey,  of  the  Carnegie  company.  "  I  know  of  only  one 
steel  works  in  this  country  that  isn't  trying  to  beat  its  record." 

"  No  truthful  steel-maker  can  deny  that  we  are  too  likely 
to  sacrifice  quality  to  tonnage,"  said  one  of  Carnegie's  former 
partners,  who  wished  his  name  withheld.  "There  is  steel 
turned  out  when  there  is  a  rush  of  orders  that  is  not  good 
enough  to  use,"  said  he.  "  After  all,  this  Bessemer  process  is 
an  ocular  process  only.  It  is  not  exact.  It  cannot  be  made 
exact.  A  workman  stands  and  looks  at  the  colour  of  the 
sparks.  If  he  is  careless — if  he  is  tired,  the  whole  batch  of 
rails  may  be  flawed.  The  open-hearth  process  is  slower  and 
much  more  accurate.  It  is  like  a  cook  making  soup  and 
tasting  it  every  now  and  then  until  it  is  just  right." 

"If  I  were  only  young  again — if  I  were  only  fifty  instead 
of  eighty-five — I'd  start  a  steel  works,"  said  John  Fritz,  when 
I  talked  with  him  in  his  plain  little  stable-office  at  Bethlehem. 
"There  never  was  such  a  chance  as  there  is  to-day.  But," 
he  added  with  stern  emphasis,  "  I'd  go  in  for  quality — qual- 
ity— quality.  The  greatest  steel-maker  of  the  future  will  be 
the  man  who  makes  the  best  steel,  not  the  most." 

Among  practical  steel-makers,  no  name  ranks  higher  than 
that  of  John  Fritz.  He  and  Holley  are  the  only  two  who 
have  been  publicly  honoured  by  their  co-workers.  He  was 
the  leader  of  his  profession  before  Carnegie  had  made  his  first 

360 


THE   FUTURE   OF   STEEL 

steel  dollar.  He  belongs  to  the  past,  of  course,  but  he  is  a 
man  who  speaks  with  knowledge  and  authority.  His  voice 
is  the  clearest  in  predicting  that  in  the  future  steel  will  be 
made  first  for  use  and  second  for  profit. 

A  rough  and  ready  civilisation  demanded  a  rough  and 
ready  metal.  But  with  the  increase  of  capital — with  the  de- 
mand for  bridges  that  will  not  fall,  boilers  that  will  not  burst 
and  buildings  that  will  not  burn,  we  shall  have  a  steel  that  is 
safe  first  and  cheap  afterward.  The  compulsion  of  public 
opinion,  aroused  by  a  continuance  of  disasters  caused  by  cheap 
and  flimsy  materials,  will  push  the  steel  men  away  from  quan- 
tity to  quality.  The  terrible  Ashtabula  bridge  disaster  in 
1877  raised  the  quality  of  metal  used  in  bridges  fifty  per  cent. 
The  burning  of  a  tinder-box  theatre  in  Chicago  has  made 
every  American  theatre  safer.  The  tragedy  of  the  General 
Slocum  has  put  scores  of  fire-trap  steamships  out  of  commis- 
sion. And  the  disasters  that  are  being  caused  by  bad  steel  are 
gradually  proving  that  "  the  best  is  the  cheapest." 


THE   FLESH  AND  BLOOD  COST 

In  this  story,  which  is  mainly  a  tale  of  how  steel  has  been 
turned  into  millions,  there  is  no  room  to  tell  of  the  myriads 
of  workmen  who  have  lived  and  died  under  the  furnace  smoke. 
The  flesh-and-blood  cost  of  the  millions  is  another  story.  But 
even  the  directors — the  financiers  who  have  perhaps  never 
seen  how  the  rank  and  file  earn  their  wages — are  discussing 
ways  and  means  to  make  their  steel  plants  less  frantic  and 
dangerous  for  the  workmen.  A  machine  can  be  operated  fast 
—the  faster  the  better.  But  a  man  is  not  a  machine,  and 
should  not  be  compelled  to  have  a  machine  as  his  pace-maker. 
Machinery  has  raised  the  standard  of  a  day's  work  to  such  an 
extent  that  no  human  being  can  compete.  There  must  be  two 

361 


THE   ROMANCE   OF   STEEL 

standards  in  the  future — one  for  the  machine  and  one  for  the 
man. 

"  It  is  terrible  how  the  workmen  are  being  goaded,"  said 
John  Fritz.  "We  have  no  right  to  shorten  a  man's  life  by 
spurring  him  on  to  break  the  record  of  yesterday.  The  piece- 
work system  and  all  bonus  systems  are  injurious  stimulants  to 
production.  The  employer  should  pay  each  man  a  fair  price 
for  a  fair  day's  work  and  be  content." 

In  a  few  years  these  goaded  workmen  are  nervous  wrecks, 
thrown  on  the  street  like  a  squeezed  lemon,  after  having  set 
a  standard  of  work  which  their  unfortunate  successors  must 
maintain. 

No  one  with  natural  human  sympathies  can  pass  through 
a  steel  mill  without  feeling  that  there  is  something  merciless 
in  the  way  workmen  are  prodded  on  to  produce  more,  and 
more,  and  more.  There  is  an  infernal  aspect  to  the^frantic 
haste — the  harsh  cries — the  desperate  energy — the  fire  and 
smoke  and  roar  of  machinery.  The  remorseless  mechanism 
of  the  mill — nine-tenths  steel  and  one-tenth  human — stops  for 
nothing  by  night  or  by  day.  "  You  must  either  draw  or  be 
dragged  to  death."  There  is  a  mill  in  Chicago  that  makes 
seven  steel  rails  a  minute.  Every  second  means  a  dollar  and 
a  half. 

"The  English  idea  with  regard  to  blast  furnaces,"  said 
Superintendent  Charles  S.  Price,  of  the  Cambria  Steel  Works, 
"  is  to  run  moderately  and  save  the  lining.  What  do  we  care 
about  the  lining?  We  think  that  a  lining  is  good  for  so  much 
iron  and  the  sooner  it  makes  it  the  better." 

This  is  the  American  plan — the  plan  that  makes  the  profits. 
And  there  is  no  necessity  to  organise  a  society  for  the  preven- 
tion of  cruelty  to  furnaces.  But  why  apply  this  pitiless  plan 
to  the  workmen?  Why  say  that  a  man  is  "  good  for  so  much 
work  and  the  sooner  he  does  it  the  better"  ?  With  the  future 
of  the  American  steel  trade  in  view,  will  it  pay  in  the  long 

362 


THE    FUTURE   OF    STEEL 

run  to  tear  out  the  lives  of  men — to  burn  them  up  like  coke 
and  toss  them  on  the  cinder-pile  at  forty? 

Much  sympathy  has  been  expended,  and  rightly,  upon  those 
who  are  compelled  to  work  in  sweat-shops.  But  a  sweat-shop 
is  a  haven  of  safety  and  rest  compared  to  a  steel  plant.  There 
is  little  public  opinion  with  regard  to  the  perils  of  a  steel 
mill,  for  the  reason  that  few  outside  of  the  trade  know  any- 
thing personally  of  the  conditions  that  exist.  Ladies  visit 
sweat-shops,  but  they  never  enter  a  steel  mill.  In  fact,  as  I 
found  on  every  occasion,  no  visitor  is  allowed  to  enter  a  steel 
works  who  does  not  first  sign  a  paper  releasing  the  company 
"  from  all  liability  for  accident  or  injury." 

"  None  of  the  people  outside  know  what  our  work  is  like," 
said  a  veteran  steel-worker.  "  You  or  some  one  else  may  dodge 
through  here  with  a  guide  for  half  an  hour,  but  you  see  little 
of  the  real  conditions.  Why,"  he  continued,  with  fine  scorn, 
"what  do  you  think?  Queen  Victoria  once  went  to  visit  a 
steel  works  in  Sheffield.  She  wanted  to  see  for  herself  how 
iron  and  steel  were  made.  So  one  of  the  steel  corporations 
took  some  of  their  machinery  and  set  it  up  in  a  beautiful  green 
field.  The  workmen  were  all  dressed  up  in  white  uniforms. 
I  suppose  they  wore  collars,  cuffs,  and  patent-leather  shoes. 
There  was  no  smoke.  Everything  was  as  bright  and  clean 
as  a  game  of  cricket.  The  Queen  sat  there  in  an  armchair  and 
watched  them  play  with  a  few  white-hot  bars  of  steel,  and 
very  likely  went  away  with  the  idea  that  she  had  seen  a  steel 
mill. '  Nobody  knows  what  the  work  is  like  except  we  men 
who  do  it,  and,  you  see,  we  don't  write  stories  for  magazines 
or  make  speeches.  This  is  the  first  time  in  my  life  that  I 
ever  talked  for  publication." 

Before  the  machinery  period  began,  the  work  required  more 
muscle,  but  less  nervous  energy.  It  demanded  more  strength, 
but  less  vitality.  There  was  more  tugging  and  straining,  but 
less  danger.  "When  a  man  was  killed  fifty  years  ago,  the 

363 


THE   ROMANCE   OF   STEEL 

mill  was  shut  down  until  he  was  buried — a  day  or  a  day  and 
a  half,"  said  Miles  Humphreys,  ex-President  of  the  Amalga- 
mated Iron  and  Steel  Association. 

There  is  a  pressed-steel  car-works  in  Pittsburgh  to  which  the 
workmen  of  the  city  have  given  the  nickname  of  "  the  slaugh- 
ter-house." Rod-mills,  too,  are  even  more  dangerous  than  an 
ordinary  rolling-mill.  The  red-hot  rods  dart  and  twist  about 
like  long  red  snakes,  sometimes  spearing  a  workman  or  taking 
a  kink  and  whirling  around  his  body.  On  behalf  of  the  cor- 
porations it  should  be  said  that  many  of  the  Italians,  Slavs,  and 
Finns  show  a  strange  indifference  to  death.  "  Throw  him  on 
scrap-heap.  Dead  man  no  good,"  they  will  frequently  say, 
when  one  of  their  companions  is  killed.  If  two  Huns  or  Slavs 
are  working  together  in  a  mine,  and  one  is  accidentally  killed, 
the  other  has  been  known  to  continue  stolidly  with  his  work, 
while  the  body  of  his  comrade  lay  beside  him. 

"Oh,  yes,  there  are  several  Finlanders  killed  here  nearly 
every  week,"  said  the  editor  of  a  newspaper  in  the  Lake 
Superior  mining- region.  "  We  have  two  morgues  in  this 
town,  and  I've  seen  both  of  them  full  at  once.  But  what  can 
be  done?  A  Finlander  doesn't  care  as  much  about  being 
killed  as  I  do  about  having  my  tooth  pulled." 

Besides  what  was  told  to  me  about  these  dangers,  on  several 
occasions  I  learned  something  about  them  at  first  hand.  In 
one  Alabama  ore-mine  I  terrified  the  guide  by  walking  on 
top  of  a  wholly  unguarded  pile  of  dynamite,  which  lay  in  one 
corner  of  the  dark  mine.  At  another  I  was  given  permission 
to  enter  the  mine,  but  was  warned  that  I  had  better  walk 
down,  and  not  ride  in  the  ore-cars.  "  The  cable  may  break," 
said  the  superintendent.  The  negro  miners  were  going  con- 
stantly up  and  down  on  these  cars.  The  cable  was  considered 
safe  enough  for  them,  but  not  for  others.  At  a  third  mine  I 
saw  a  train  of  ore-cars  derailed. 

At  a  Wilkes-Barre  coal-mine  I  saw  an  old  workman  struck 

364 


THE    FUTURE   OF    STEEL 

and  fatally  injured  by  a  shifting  engine,  which  carried  no 
fender.  At  the  Bethlehem  Steel  Works  I  saw  a  heavy  splash 
of  white-hot  steel  fly  within  a  few  inches  of  a  workman's  face. 
Had  it  struck  him  he  would  at  least  have  been  scarred  for  life. 
Yet  he  acted  as  if  it  were  a  trifling  matter,  pulled  his  hat 
farther  down  over  his  eyes,  swore,  and  jumped  back  to  his 
place  beside  the  great  vat  of  molten  metal.  Such  incidents 
were  all  in  the  day's  work. 

And  so,  as  I  have  gone  from  one  steel  city  to  another,  I 
have  felt  more  often  like  a  war  correspondent  than  like  the 
writer  of  a  story  of  peace  and  prosperity.  The  steel  business 
is  not  all  dividends  any  more  than  war  is  all  flags  and  music. 
There  is  a  stern  side — a  side  which  ought  to  be  made  brighter 
by  the  steel  kings  of  the  future — to  this  story  of  a  thousand 
millionaires,  when  we  think  of  the  hand-to-hand  warfare  that 
is  being  waged  under  the  smoke  of  the  furnace  and  the  mill — 
the  clank  and  the  clatter  of  furious  machines — the  sullen 
smoulder  of  the  coke-ovens — the  desperate  pickaxe  conflict 
in  the  coal-mines — and  the  sudden  groan  of  the  wounded  or 
the  dying. 

HIGHER  USE  OF  STEEL 

When  the  steel-shaper  becomes  an  artist  as  well  as  an 
artisan — when  the  love  of  beauty  that  reigned  among  the 
aristocratic  iron-workers  of  the  Middle  Ages  shall  be  born 
again  through  a  revolt  from  this  everlasting  speed  and  cheap- 
ness, steel  will  regain  its  former  status.  It  will  be  put  to 
higher  uses.  Even  in  the  present  commercial  conflict  of  com- 
modities, steel  has  forced  its  way  above  the  precious  metals, 
Watch  screws,  for  instance,  are  worth  $1585  a  pound,  and 
hair  springs  almost  twice  as  much.  Fully  twenty-five  pounds 
of  gold  must  be  given  for  two  pounds  of  these  tiny  nine-inch 
threads  of  steel.  When  the  swift,  frenzied  Bessemer  con- 

365 


THE   ROMANCE   OF   STEEL 

venter,  which  was  especially  suitable  for  the  preparatory 
period  of  speed  and  quantity,  is  replaced  by  the  slower  and 
surer  open-hearth  process — and  even  Mr.  Carnegie  predicts 
this — then  steel-makers  will  gradually  rise  to  higher  stand- 
ards and  more  artistic  aims.  The  most  matter-of-fact  steel 
men  are  recognising  this  upward  movement  in  the  business. 

The  open-hearth  furnace  is  to  be  the  caldron  of  civilisation. 
Out  of  its  fiery  depths  will  come  not  only  the  locomotives,  the 
steamships,  and  the  steel  cities  of  the  future,  but  also  the  lancet 
of  the  surgeon,  the  telescope  of  the  astronomer,  the  needle  of 
the  explorer,  and  perhaps  the  "  airy  navies  grappling  in  the 
central  blue."  Out  of  it  will  come  many  a  new  automatic 
machine  which  is  to-day  no  more  than  an  inventor's  dream. 
As  civilisation  rises,  so  the  quality  and  uses  of  steel  will  rise. 
Not  even  the  human  race  has  within  it  more  possibilities  of 
development  than  the  red  iron-ore  of  Minnesota  and  Alabama. 

"  We  are  on  the  eve  of  a  development  of  the  manufacturing 
powers  of  the  republic  such  as  the  world  has  never  seen,"  said 
Andrew  Carnegie.  "  And  the  nation  that  makes  the  cheapest 
steel  has  the  other  nations  at  its  feet." 

"  We  have  only  begun  to  show  the  world  what  we  can  do," 
said  Schwab  in  his  rapid-fire  way.  "We  have  almost  unlim- 
ited natural  resources.  In  this  age  of  invention  we  have  all 
the  qualities  that  are  necessary  to  leadership.  The  road  to 
wealth  and  power  is  still  open.  In  every  part  of  the  country 
I  find  men  who  have  in  a  few  years  lifted  themselves  from 
wages  to  millions.  We  are  neither  dragging  nor  drifting. 
Business  is  steadier  and  better  organised.  And  as  the  years 
go  by,  we  will  work  in  a  larger  way  and  on  larger  problems 
than  ever  before." 

Elbert  H.  Gary,  the  official  head  of  the  United  States  Steel 
Corporation,  when  I  asked  him  for  a  final  word  upon  the 
future  of  steel,  replied — "The  achievements  of  the  past  six 

366 


THE   FUTURE   OF   STEEL 

years  have  shown  that  Mr.  Morgan  was  right  in  the  view 
which  he  has  always  taken  of  the  American  steel  industry. 
The  keynote  of  his  success  has  been  confidence  in  the  great 
future  of  the  United  States, — a  confidence  which  has  never 
been  shaken  by  transient  reverses.  His  father,  who  tutored 
him  in  the  knowledge  of  finance,  would  often  say  to  him: 
'  Pierpont,  the  pessimists  may  secure  a  temporary  advantage, 
but  it  is  only  a  question  of  time  when  the  growth  of  the  country 
will  beat  them.'  Upon  this  belief  Mr.  Morgan  acted  when  he 
placed  the  iron  and  steel  business  upon  a  solid  and  permanent 
basis;  and  sooner  or  later  the  whole  American  nation  will 
share  his  confidence  in  its  future  prosperity.  " 

The  great  Morgan  himself,  who  says  little  and  finds  it  easier 
to  express  himself  in  millions  than  in  words,  said,  when  asked 
as  to  the  immense  steel  corporation  which  he  had  designed 
and  created :  "  I  have  no  hesitation  in  saying  that  the  next  six 
years  will  show  even  greater  success  and  prosperity  than  has 
been  shown  in  the  last  six  years." 

And  so,  the  concluding  word  of  this  story  of  steel  is — Prog- 
ress. There  is  no  difficulty — not  even  in  the  imagination  of 
the  pessimist — which  is  greater  than  those  that  have  already 
been  overcome  by  the  steel  men  of  yesterday  and  to-day.  The 
next  generation  will  find  new  methods  and  new  markets.  Even 
now  there  are  dreamers  who  can  see  the  uprising  of  steel- 
ribbed  civilisations  in  Russia,  Africa,  and  Asia,  in  that  nearby 
age  when  a  Greater  Human  Race  of  two  thousand  million 
people  shall  move  upward  to  American  levels. 


THE  END 


367 


INDEX 


Abbott,  W.  L.,  149,  275 
Allen,  Ethan,  41,  163 
Amalgamated     Association     of     Iron 

Workers,  134,  135,  249 
Steel  Workers,  in,  114 
Anne,  Queen,  38 
Anshutz,  George,  162,  289 
Armour-plate,  169 
Arnold,  Benedict,  43 
Ashtabula,  350 


Bishop,  Joseph,   137 
Blackburn,  W.  W.,  151,  197 
Blaine,  James  G.,  113 
Blair,  C.  L.,  329 
Boerntrager,  H.  W.,  152 
Bope,  H.  P.,  151,  275 
Bordman,  A.  B.,  301 
Bowron,  James,  300 
Buffalo,  327 
Burt,  W.  R.,  66 
Byrd,  Colonel  W.,  283 


B 

Bacon,  Don  H.,  301 

Bacon,  R.,  191,  214 

Baer,  G.  F.,  326 

Baker,  Charles  W.,  150 

Beaman,  D.  C.,  311 

Bell,  Sir  I.  L.,  27 

Belmont,  August,  301 

Benner,  General  Philip,  41 

Berg,  P.  T.,  152 

Berkeley,  John,  first  American 

maker,  35,  36 
Berwind,  E.  J.,  295 
Bessemer,  Sir  Henry — 

His  wealth,  13 

His  inventions,  14 

His  failure,  15 
Birmingham — 

Beginnings  of,   294 

Ore  wealth,  296 

Natural    resources,    297 


Cambria  plant,  122 

Carnegie,  Andrew — 

Childhood  in  Allegheny,  70 
His  first  job,  70 
His  "lawless  initiation,"  71 
Enters  iron  business,  73 
Early  struggles,  74,  75 
First  attempt  as  an  author,   77 
First  large  profits,  81 

iron  First  view  of  a  Bessemer  con- 

verter, 83 

Secret  of  his  early  success,  85 
First  large  steel  profits,  90,  91, 

94 
Becomes   foremost  steel   maker, 

93 

His  first  partners,  95 
The  Caesar  of  steel,  103 
Buys  Homestead  plant,   no 
Buys  Duquesne  plant,  113 
369 


370 


INDEX 


Carnegie,  Andrew — Continued 
His  system  of  business,  124 
His  faith  in  steel,  126 
His  enterprise,  127 
Belief  in  publicity,  128 
His  knowledge   of   details,    129 
His  progressiveness,   130 
A  just  employer,  139 
His  working  partners,  145,  154, 

200 

His  master  stroke,   160 
His  idea  of  a  corporation,  161 
His  fight  for  speed,  164,  167 
A  medley  of  opposites,    170 
His  American  spirit,  171 
His  enormous  profits,  172 
Quarrel  with  Frick,  175 
His  selling  campaign,  184 
Wages  war  on  competitors,  185 
His  able  generalship,  186 
His  stupendous  selling  price,  189 
His  magnificent  pension,  203 
His  democratic  habits,  205 
Personal  characteristics,  206 
His  amazing  philanthropy,   208 
Gifts  to  Pittsburg,  277 
His  dream  of  the  future,  339 

Carnegie,  Mrs.  T.  M.,  196 

Carnegie,  Thomas,   79,   80 

Carnegie  Veterans,  202 

Carr,  W.  A.,  178 

Cass,  A.  C,  311 

Chambers,  Colonel  James,  41 

Cheap  steel,  4 

Chisholm,   Henry,   16,   352 

Chisholm,  William,  2O 

Civil  War,  3,  47 

Clarke,  E.  A.  S.,  329 

Clemson,  Daniel  M.,  146,  151 

Clergue,  F.  H.,  187 

Cleveland,  351 


Cleveland,   Grover,    138 

Clifford,  Alfred,  234 

Coke,  Supremacy  of  Frick,  107 

A  model  plant,  246 
Colburn,  Zerah,   13 
Coleman,  Captain  R.,  41 
Coleman,  William,  82,  97 
Conneaut,  350 
Connellsville,  1 08,   109 
Converter,  15,  83 
Corey,  W.  E.,  158,  159,  196,  200 
Cowan,  Christopher,  290 
Cromwell,  W.  N.,  213 
Curry,  H.  M.,  90,  145,  153 


Danforth,  A.  H.,  311 

Danger     of    steel     industries,     122, 

36i 

De  Bardeleben,  H.  F.,  299 
Dexter,  Thomas,  37 
Dill,  J.  B.,  176 
Dinkey,  A.  C,  148,  251 
Disston,  Henry,  163,  324 
Dolan,  Thomas,  213 
Drake,  John  A.,  213,  234 
Duluth,  56,  244,  354 
Duquesne  plant,   113 
Durfee,  Zohetti  S.,  17 


Edenborn,  William,  234 

Ellwood,  I.  L.,  234 

England — 

First  to  sell  steel  rails,  24 
Loses  supremacy  in  steel,  27 
Buys  American  machinery,  46 

Erskine,  Robert,  42 

Everett,  Philo  M.,  49,  50,  51 


INDEX 


G 


Faesch,  Squire,  39,  286 

Falling  Creek,  35,  36 

Ferguson,  E.  M.,  107 

Field,  Marshall,  191,  213 

Fleming,  J.  C.,  150 

Flower,  R.  P.,  183,  191 

Foreign  trade,  347 

Forsyth,  Robert,  20,  329 

Frazer,  Colonel  P.,  41 

Free  Trade,  138 

French,  Aaron,  267 

French,  G.  W.,  301 

Frick,  Henry  Clay — 

As  a  boy  worker,  104 
Enters  coke  business,  105 
Dominates  coke  business,   107 
His  improvements,  108 
Becomes  partner  of  Carnegie,  109 
Wins  fight  with  Amalgamated, 

137 

His  share  of  profits,  168 
Quarrel  with  Carnegie,  175 
Personal     characteristics,      177, 

1 80 
A   central    figure    in    American 

finance,    178 
His  family,  179 
Tries     to     buy     out     Carnegie, 

182 

Becomes  real  estate  king,  202 
His  view  of  United  States  Steel 

Corporation,  257 
Fricke,  Dr.,  128 
Fritz,  George,  20,  359 
Fritz,  John,  2,  '16,    133,  255,  33O, 

360 

Frontenac,  Comte  de,  38 
Fry,  John  E.,  20 
Future  of  Steel,  338 


Garland,  M.  M.,  137 

Garrard,  William,  353 

Gary,  247 

Gary,  Elbert  H.,  191,  215,  216,  236, 

255 

Gates,  J.  W 

His  strenuous  career,  232 
Exploits  with  barbed  wire,  233 
His  picture  gallery,  234 
Investments  in  Alabama,  303 
Investments  in  Colorado,  313 

Gayley,  James,  29,  30,  33,  196,  200, 
244,  337,  356 

Griswold,  John  A.,  17,  18,  25 

Golden  flood  of  steel  profits  begins, 
90 

Gould,  George  J.,  313,  319 

Grafrenreid,  Baron  de,  38 

Grant,  Ulysses  S.,  290 

Greene,  Maj.-Gen.  Nathanael,  41 

Grubb,  Colonel  C.,  41 

Grubb,  Colonel  P.,  41 

H 

Hamby,  Captain   J.  D.,  306 
Hanna,  L.  C.,  303 
Hanna,  Mark,  331 
Harriman,  E.  H.,  313 
Hasenclever,  Baron,  38,  39,  40,  220, 

286 

Hawley,  E.,  313 
Hearne,  F.  J.,  295,  309,  315 
Hewitt,  Abram  S.,  16,  214,  297  •» 
Hill,  J.  J.,  332 
Hillman,  Daniel,  300 
Hillman,  T.  T.,  300 

Hills,  R.C.,  311 
Hoffman,  J.  O.,  150 
Holley,  Alexander  L.,  16,  19 


372  INDEX 

Homestead  plant,  no,  141 

Strike,  132,  136 
Hopkins,  Stephen,  41 
Howe,  Henry  M.,  48 
Howe,  Thomas  M.,  267 
Humphreys,  Miles,  137,  364 
Huns,  107,  109,  253 
Hunt,  A.  R.,  151,  275 
Hunt,  Robert  W.,  2,  12 
Hussey,  C.  G.,  16,  267 
Huston,  Charles,  163 


K 


I 


International  Harvester  Co.,  326 
Injunction      against      colonial      iron 

makers,  44 
Iron,  what  it  is,  48 
Irvin,  General  James,  41 
Iselin,  A.,  Jr.,  329 


Kebler,  J.  A.,  311 
Keith,  Sir  William,  38 
Kelley,  Mrs.  N.  H.,  332 
Kelly,  William, 

Early  history,  5 

His  discoveries,  6 

Makes   first   "  Bessemer  "   steel, 

7 

His  difficulties,  8 
First  tilting  converters,  9 
His  later  career,  10 
His  rewards,  13 
His  fight  for  patents,  12 

Kennedy,  Julian,  112,  141,  260,  27^ 

Kessler,  G.  A.,  303 

King,  Willis  L.,  272,  336 

Kloman,  Andrew,  73,  79,  97,  98 

Krupp  Works,  279 


Jarrett,  John,  137 
Jenks,  John,  37 
Jenks,  Joseph,  37,  286 
Jerome,  J.  L.,  311 
Johnson,  Gen.  Thomas,  41 
Johnson,  Tom  L.,  166,  331 
Jones,  B.  F.,  16,  322 
Jones,  B.  F.,  Jr.,  320 
Jones,  D.  N.,  20,  23 
Jones,  William  R.,  16 

His  boyhood,  21 

Education,  21 

At  Johnston,  23 

Becomes  a  Carnegie  manager,  24 

Breaks  world's  records,  25 

His  achievements,  29,  30 

A  leader  of  men,  31 

His  tragic  death,  33 


Labour — 

How  William  Jones  engaged  his 

men,  31 

In  coke  regions,  107 
In  early  iron  mills,  283 
Negro,  in  Alabama,  306 
Formula  of  Captain  Jones,  133 
And    the    United    States    Steel 
Corporation,  249,  252 

Lambert,  John,  234 

Lambing,  A.  A.,  282 

Lauder,  George,  147,  167 

Laughlin,  James,  322 

Leader,  Richard,  37,  284 

Leeds,  W.  B.,  235 
'•"*  Leibert,  Owen,  20 

Leith,  A.  J.  F.,  191 

Lewis,  General  William,  41 


INDEX 


373 


Leishman,  J.  G.  A.,  149,  196 
Lincoln,  Abraham,  41 
Lindsay,  Homer  J.,  151,  275 
Louis  XV.,  King,  38,  39 
Lovejoy,  F.  T.  F.,   148,   180,   196, 

275 

Lucy  furnaces,  88,  89 
Lukens,  Mrs.  Rebecca,  44 
Lynn,  36,  37 


M 


McCandless,  David,  82,   100 
McClurg,  Joseph,  289 
McCausland,  W.  C.,  151,  275 
McMurtry,  G.  G.,  252 
Machinery — 

In  steel  business,  131,  251 

Struggle  with  labour,  135 

Of  Homestead,  142 

Steel  rail,   143 

Future  of,  358 
Marmie,  Peter,  289 
Massacre  of  iron-makers,  36 
Mathiot,  Colonel,  41 
Meeson,  Colonel  I.,  41 
Mellons,  A.  W.,  178 
Merritt,  Alfred,  56 
Merritt,   Leonidas,    56,   57 
Merritt,  Lewis  H.,  55 
Mesaba  range,  55,  56,  57,  58,  59,  60 
Meyer,  Cord,  301 
Milwaukee,  354 
Miller,  Thomas  N.,  73,  74,  95,  96, 

139 

Milliken,  Foster,  331 
Mills,  D.  O.,  191,  213,  329 
Moore,  S.  E.,  153 
Moore,  W.  H.,  181,  203,  215 
Morgan,  Gen.  D.,  41 


Morgan,   J.    P. — 

Refuses  to  enter  steel  business, 

182 

His  personality,  210 
How  he  built  the  United  States 

Steel  Corporation,  211 
His  fee,  214 

His  herculean  task,  218 
Statistics,   218 
His  supreme  aim,  243 
His    prophecy    for    the    future, 

367 

Morrell,  Daniel  J.,  16,  17,  19,  324 
Morrison,   Thomas,    115,    146,    148, 

195 

Morton,  Paul,  311 
Mushet,  Robert  F.,  u,  13 


N 


Nelson,  C.  N.,  66 


O 


O'Day,  Daniel,  213 

O'Donnell,  Hugh,  140 

Oglebay,  E.  W.,  295,  303 

Oliver,  Henry  W — 

His  picturesque  career,   118 
Becomes    partner    of    Carnegie, 

117 

His  ride  to  Mesaba,  119 
His  total  profits,  194 
His  Pittsburg  residence,  275 

Ore,  Lake  Superior — 

Cheaper  than  sawdust,  47 
First  discovery,  49,  50 
Immense  deposits,  57,  58 
Worth  a  thousand  million,  62 
In  Minnesota,  334 

Ore-fleets,  60,  61 

Ore-ports,  62 


374 

Ore-machinery,  63 
Ore-railroads,  63,  64,  121 
Ore  fortunes,  65,  66,  67 
Ore  mines  in  early  days,  287 
Osgood,  J.  C.,  311,  312,  317 


INDEX 


R 


Palmer,  General  W.  J.,  311 

Park,  James,  12 

Park,  William,  114,  326 

Peacock,  A.  R.,  151,  195,  275 

Perkins,  G.  W.,  192,  214,  228,  237 
250,  257 

Phipps,   Henry — 

Enters  iron  business,  73,  173 
Personal  characteristics,   174 
Ability  as  a  financier,  79 
His  philanthropies,  2O2 

Phipps,  L.  C.,  318 

Philadelphia,  323 

Pitcairn,  Robert,  71 

Pittsburg — see  section  2 

Porter,  H.  H.,  54,  191,  213 

Porter,  William,  289 

Potter,  John  A.,  150 

Potter,   Orrin  W.,  20 

Price,  Charles  S.,  165,  362 

Profits- 
First  profits  of  Carnegie  Co.,  94 
Of  workman  partners,  193 

Pueblo- 
Beginnings  of,  294 
Natural  resources,  309 
Early  history,  311 
Developments   of   iron   business, 

315 

Workshop  of  the  West,  317 
Future  of,  319 
Putman,  General  R.,  41 


Railroads  adopt  steel  rails,  24 
Raleigh,  Sir  Walter,  35 
Reading,  325 
Ream,  N.  B.,   191 
Reid,  D.  G.,  235 
Rebates,  116 
Revere,  Paul,  42 
Revolution,  American — 

Begun  by  iron  makers,  43 

Iron  makers  in,  41,  42 
Reynolds,  Major  S.  M.,  42 
Rhodes,  D.,  331 
Rhodes,  Joshua,  267 
Richards,  E.  Windsor,  27 
Richards,  Captain  William,  42 
Risks  in  steel  trade,  168 
Rockefeller,  John  D.— 

Ore  deals,  57 

Tries  to  buy  Carnegie  Co.,  183 
Rockefeller,  John  D.,  Jr.,  313 
Rogers,  H.  H.,  178,  191 
Rogers,  W.  A.,  348 
Rookery,   first   steel   frame   building, 

H3 
Ross,  George,  41 


Sage,  Russell,  243 

St.  Clair,  General  A.,  42 

Schiller,  W.  B.,  217 

Schley,  G.  B.,  303 

Schoonmaker,  S.  L.,   107,   176,   196, 

301 
Schwab,  Charles  M.— 

Makes    continuous    steel     mill, 

116 
Superintendent    of    Homestead, 

141 
Meteoric  career,  155 


INDEX 


375 


Schwab,   Charles  M. — Continued 
First  position,  156 
Ability  as  a  steel  manager,   157 
Personal  characteristics,  158 
New  York  mansion,  159 
His  share  of  profits,  168 
The  world's  champion  salesman, 

190 

His  Bethelem  plant,   330 
His  prophecy  for  the  future,  366 

Scott,  James,  89,  197 

Scott,  John,  101 

Scott,  Thomas  A.,  71,  99,   100 

Scran  ton,  W.,  329 

Shinn,  William  P.,  101 

Sheldon,  S.  B.,  329 

Skyscrapers  of  the  future,  343 

Singer,  W.  H.,  275 

Slavs,  107,  109,  253 

Sloat,  H.  R.,  301 

Sloss,  Colonel  J.  W.,  305 

Smith,  J.  H.,  301 

Speed,  93,  166 

Spooner,  Senator,  191 

Stackhouse,  P.,  324 

Steele,  Charles,  213 

Stiegel,  Baron,  38,  39,  40,  284 

Sternbergh,  J.  H.,  326 

Stetson,  F.  L.,  192 

Stevenson,  John,  87 

Stewart,  David  A.,  101 

Stirling,  Lord,  38 

Sunday  work,  32 

Stone,  George  C,  52,  53,  54 

Stuntz,  George  R.,  52 

Swank,  James  M.,  13,  1 8 

Swensson,  Emil,  151 


Tariff,  188,  235,  286,  292,  331 
Taylor,  Moses,  329 


Texas,  355 

Thomas,  David,  21,  133,  285 

Thayer,  N.,   191,  213 

Topping,  John  A.,  295,  304 

Torley,  J.  J.,  267 

Tower,  Charlemange,  53,  54 

Tracy,  B.  F.,  301 

Transportation,  287 

Twombly,  H.  McK.,  329 

U 

United  States  Steel  Corporation — 
Magnitude,  I,  216,  240 
Origin  of  consolidation,   191 
The  meaning  of  its  millions,  221 
Its  vast  assets,  223 
Advantages      of      consolidation, 

228,  249 

Over  capitalisation,  229 
Actual  value,  231 
A  product  of  the  human   race, 

238 

First  annual  report,  239 
Depreciation  of  stock,  241 
Its  key  note,  244 
Its  model  coal  mine,  245 
Six  years  of  progress,  255,  258 
Relation    to    independent    com- 
panies, 335 
United  S«ns  of  Vulcan,  134 


Van  Cortland,  R.  B.,  329 
Vanderbilt,  Cornelius,  329 
Vandervort,  John  W.,  IO2 
Vaughn,  Colonel  J.,  42 

W 

Waples,  Colonel  William  D.,  42 
Wages— 

At  Homestead,   140 


376 


INDEX 


Wages — Continued 

At  Pittsburgh,  264 
In  early  iron  mills,  283 

Wall  Street,  225,  227,  242,  254 

Ward,  Captain  Eber  B.,  3,  16,  352 
First  of  the  steel  kings,  17 

Washington,    George,    41,   42,    278, 
286 

Wehrum,  Henry,  328 

Weihe,  William,   137 

West  Point  chain,  42 

Wharton,  J.,  325 

White,  Peter,  49,  51 

Whitney,  W.  C.,  330 

Widener,  P.  A.  B.,  213,  323 


Winslow,  John  F.,  17 
Winthrop,  Governor,  36 
Wolcott,  Senator,  311 
Wonders  of  steel,  340 
Woodward,  James  T.,  301 
Wright,  Carroll  D.,  167 


Youth  of  American  steel  business,  2, 

34 
Yerkes,  Charles  T.,  342 


Zug,  Christopher,  267 


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